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Business  Practice  Bookkeeping 


A  THOROUGH  TRLATI5L  ON 


Modern  and  Practical  Methods  of  Accounting 


FOR  THE.  U5L  OF 


Business  and  Commercial  Schools  and  Colleges,  Commercial  High  Schools 

Technical  Schools,  and  Commercial  Departments  in 

Other  Educational  Institutions 


By  JAMES  5.  5WLET,  A.  M. 


Author  of  Bookkeeping  by  Actual  Business  Practice,  Modern  Business  Arithmetic, 

Business  Practice  Correspondence,  Business  Practice  Speller, 

Class  Drills  in  Rapid  Calculation,  Etc. 


J.  5.  SWEET  PUBLISHING  COMPANY 

SANTA  ROSA,  CAU  CHICAGO.  ILL 


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Entered  according:  to  Act  of  Congress,  in  the  year  1913 

By  J    S.  SWEET.  A.M.. 

Inlbe  Office  of  the  Librarian  of  Congres.s, 

at  Washington,  D.  C. 


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PREFACE 


ART  OF  BOOKKEEPING  and  the  Science  of  Accounts  of  seventeen  years 
ago  will  not  satisfy  the  demands  of  the  business  men  of  today.  The  great 
increase  of  business,  the  sharp  competition,  the  close  margins,  all  require 
the  very  shortest  and  quickest  methods  to  accurate  results.  The  modern 
duplicating  and  billing  devices,  the  typewriter  and  adding  machines,  the 
loose  leaf  and  mechanical  ledgers,  and  the  various  systems  of  filing  and  registering  that  have 
come  into  common  use,  require  of  the  commercial  school  a  training  that  will  meet  the  demand 
of  the  times. 

The  text  on  the  science  of  accounts  that  was  a  success  ten  years  ago  is  already  obsolete  and 
must  be  supplemented  by  much  special  work  by  the  teacher  in  order  to  properly  prepare  the 
student  for  the  duties  of  the  modern  office.  Many  of  the  best  business  colleges  have  already  es- 
tablished "  Office  Practice"  departments  to  provide  for  this  deficiency  in  the  text  used. 

While  it  is  impossible  to  illustrate  fully  in  a  text  all  modern  methods  of  accounting,  we  believe 
that  the  student  who  completes  the  work  as  presented  in  this  book  will  have  no  trouble  in  under- 
standing any  practical  system  of  accounts  which  may  come  to  his  notice.  The  forms,  processes, 
and  work  are  taken  from  actual  books  of  the  counting  house  and  have  been  fully  tested  in  one  of 
the  most  successful  and  practical  business  colleges  of  America.  They  have  been  compiled  by  an 
expert  accountant  from  a  pedagogical  standpoint  and  are  presented  in  a  very  attractive  manner. 
This  book  illustrates  purely  a  business  practice  system.  There  is  no  copying  from  a  text  book 
except  for  drills  in  the  model  entries  and  business  forms.  Each  student  actually  transacts  the 
business  practice  work,  and  his  books  are  a  history  of  what  he  has  done.  This  business  practice 
gives  the  student  not  only  a  clearer  understanding  of  what  he  is  doing,  but  intensifies  his  inter- 
est as  no  other  system  can  do. 

For  its  typographical  appearance  we  have  no  apology  to  make,  believing  it  will  rank  with  the 
best  work  of  any  publishing  house  in  America.  The  photo-engraved  pages  are  facsimilies  of 
actual  pen-written  work,  and  we  believe  they  will  encourage  and  stimulate  the  student  to  greater 
effort,  knowing  as  he  does,  that  they  are  the  actual  work  of  a  penman. 

Trusting  that  teachers  and  students  may  find  much  satisfaction  in  using  this  work,  we 
would  respectfully  dedicate  it  to  the  business  educators  of  America. 


Index  to  Contents 


Acceptance  Page  52 

Account  Purchare,  form  of  74 

Account  Sales,  form  of  74 

Acknowledgment  1S5 

Advanced  Single  Entry  91 

Advanced  Single  Entry  Journal  92 

Appendix  185 

Articles  of  Copartnership  187 

Articles  of  Incorporation  191 

Assessment  Book  182 

A  Word  to  Students  6 

B 

Balance  of  Balances  42 

Balance  Sheet  Complete  41 

Bank  Accounting  151 

Bank  Balance  Sheet  166 

Bank  Charges,  Time,  Expenses,  etc.  169 

Bank  Check  12 

Bank  Draft  52 

Banking,  Actual  Business  Practice  168 

Bank  Paper  149 

Bank  Paper  Accounts  157 

Banks  and  Banking  148 

Banks  and  Business  26 

Bill  or  Invoice  14 

Bond  51 

Bond,  form  of  50 

Branch  House  81 


Cash  Account  22 

Cash  Account  31 

Cash  Book,  form  of  and  discussion  58 

Certificates  of  Stock  179 

Check  Book  28 

Classes  of  Accounts  115 

Closing  the  Ledger  42 

Collection  and,  Exchange  Charges  55 

Collection  Register                               ,  156 

Commercial  Paper  48 

Commission  Accounting  132 
Commission  Cash  Book,  form  of                   136-137 

Consignment  File  or  Receiving  Book  133 

Contents  4-5 

Copyright  2 

Corporation  Accounting  175 

D 

Daily  Balance  Book  167 

Definitions  and  Discussions  7-8 

Deposit  Ledger  30 

Depositor's  Bank  Account  27 

Deposit  Slips  27 

Discount  and  Collection  Ticklers  162 

Dividend  Book  180 


Double  Entry  Bookkeeping  9 

Draft  and  Remittance  Register  155 

Draft,  Personal  51 

Due  Bill  A9 

Duties  of  Cashier,  Teller,  Accountants,  etc.  169 


Form  of  Letter  of  Credit  54 

Freight  and  Express  Charges  55 

G 

General  Balance  Sheet  of  a  Bank  161 

General  Cash  Book  158 

General  Ledger  of  Banking  161 

Guide  No.  2.     Set  II.— Produce  Business  44 

Guide  No.  3.  Set  III.— Produce  Business  56 
Guide  No.  4.     Set  IV.— Fruit,  Grain,    and 

Vegetables  64 

Guide  No.  5.  Tea  and  Coffee  Business  72 
Guide  No.  6.     Set  VI.— Groceries,  Tea, 

and  Coffee  76 

Guide  No.  7.     Boots  and  Shoes  82 

Guide  No.  8.     Hardware  Business  88 

Guide  No.  9.     Single  Entry  Improved  96 

Guide  No.  10.     Double  Entry  100 

Guide  No.  11.     Wholesale  and  Jobbing  122 

Guide  No.  12.     Commission  140 

Guide  to  Practical  Banking  170 

H 

Higher  Accounting  105 

How  to  find  errors  in  a  Trial  Balance  25 

How  to  Open  Joint  Stock  Books  182 

How  to  Receipt  a  Bill  15 


Individual  Ledger  153 

Initiatory  Practice  18 

Initiatory  Set  I. — Part  Second    .  31 

Insurance  Policy  188 

Insurance,  premium  charged  55 

Inventory  33 

Invoice  Book,  forms  of  68 

Invoice  or  Bill  14 


Joint  Stock  Companies  175 

Journal  Entry  in  Selling  Out  the  Business  62 

Journalizing  9 

Journal  Models  10 


Lease,  form  of  186 

Ledgers  of  Commission  139 

Letters  of  Credit  53 

Loan  and  Discount  Register  154 

Loose  Leaf  Systems  108 


BCrSLVESS    PRACTICE    BOOKKEEPING 


M 

Set  III.     Actual  Business  Practice 

55 

Set  IV.     Actual  Business  Practice 

65 

Main  Ledger  Closed 

34-38 

Set  V.     Actual  Business  Practice 

71 

Main  Ledger,  The 

22 

Set  VI.     Actual  Business  Practice 

75 

Memorandum  of  Credit 

80 

Set  VII.     Actual  Business  Practice 

81 

Minutes  of  Stockholders'  Meeting 

176 

Set  IX.     Actual  Business  Practice 

95 

Mortgage 

190 

Set  X.     Actual  Business  Practice 

99 

N 

Shipment  File  or  Book 

134 

Single  Entry  Bookkeeping 

84 

National  System  of  Bank  Accounting 

163 

Single  Entry  Cash  Book,  form  of 

86 

Notes  Payable  Book 

46 

Single  Entry  Journal,  form  of 

85 

Notes  Receivable  Book 

46 

Single  Entry  Statement 

90 

N.  Y.  System  of  Bank  Accounting 

152 

Skeleton  Ledger  Proof  Sheets 

116 

0 

Special  Column  Journal,  discussions 

79 

Special  Column  Journal,  form  cf 

78 

Officers  of  a  Bank 

149 

Statement  of  Account 

£0 

Opening  Journal  Entry 

57 

Statement  When  Selling  Out 

62 

Order 

51 

Stock  Cash  Book 

183 

Order  Book 

^1 

Stock  Journal 

180 

Order  Sheet 

13 

Stock  Ledger 

181 

Stocks:  Common,  Preferred,  Watered 

175 

P 

Subscription  and  Installment  Books 

178 

Paper  Currency 

49 

Subscriptions 

176 

Pass  Book 

28 

Summaries  in  Single  Entry 

93 

Pass  Book  and  Deposit  Ledgers  Compared        39         | 

T 

Posting 

22 

Posting  to  Wholesale  Ledgers 

115 

Teller's  Sheet 

164 

Preface 

3 

Teller's  Sheet,  form  of 

165 

Principles  of  Journalizing 

9 

Terms,  Charges,  etc. 

121 

Profit  and  Loss  Statements 

121 

The  Commission  Office 

131 

Promissory  Note 

16,  49 

Time.     How  computed 

121 

Purchase  Invoice  File 

110 

Title  Page 

1 

Purchase  Ledger 

114 

Trading  Statements 

120 

■r% 

Trial  Balance 

25 

R 

Trial  Balance  Complete 

40 

Receipt,  The 

11 

w 

Red  and  Black  System 

118 

Release  of  Mortgage 

185 

Warranty  Deed 

189 

s 

When  Dividends  are  Declared 

183 

Wholesale  Accounting 

108 

Sales  Book,  form  of 

66 

Wholesale  and  Jobbing,  Actual  Business 

Sales  Invoice  File  or  Commission  Sales 

Practice 

119 

Book 

109, 134 

Wholesale  Cash  Book 

111 

Sales  Ledger 

114 

Wholesale  Cash  Book,  form  of 

112-113 

Selling  Out  the  Business 

65 

Wholesale  Journal 

111 

Set  I.     Initiatory.     Part  First. 

17 

Wholesale  Ledger 

114 

Set  II.     Actual  Business  Practice 

43 

Wholesale  Office 

107 

A  Word  to  Students 

You  are  about  to  enter  upon  the  task  of  acquiring-  a  business  education.  This  is  a  laudable 
undertaking  on  your  part  and  you  should  "leave  no  stone  unturned"  that  will  prevent  its 
successful  culmination. 

Your  financial  prosperity  and  perhaps  your  future  social  welfare  depend  upon  the  success 
you  achieve  as  a  student  in  this  school.  Your  teachers,  your  classmates,  and  your  friends,  are 
expecting  much  of  you  and  you  should  see  that  they  are  not  disappointed. 

To  acquire  a  good  business  education  is  no  easy  task;  but  like  most  things  of  value,  is  secured 
only  by  determined  and  continued  effort.  To  strengthen  you  in  your  undertakings  that  you  may 
realize  your  highest  hopes  of  success,  read  with  care  the  following: 

Do  everything  well  and  in  season.  Be  systematic,  have  a  place  for  everything  and  have 
everything  in  its  pla:ce. 

Be  self-reliant,  be  courteous,  be  honest.  Ask  for  assistance  only  when  you  have  exhausted 
your  own  resources.  When  help  is  solicited,  provide  every  facility  in  the  way  of  books,  papers, 
etc.,  that  may  be  needed. 

This  may  be  the  opportunity  of  a  lifetime.  Success  before  your  teachers  and  classmates 
may  provide  a  place  of  trust  and  profit  that  will  bring  happiness  and  comfort  to  yourself  and  to 
those  who  are  interested  in  you. 

Live  for  something  that  will  benefit  humanity.  Your  conduct  should  be  such  that  others  may 
point  to  it  with  pride  and  try  to  emulate  it.  Others  are,  perhaps,  looking  to  you  for  example  in 
determining  what  is  right  and  what  is  wrong.  Little  do  we  know  what  influence  we  may  exert 
upon  those  susceptible  minds  by  which  we  are  always  surrounded.  Therefore  every  care  should 
be  taken  to  do  right,  to  speak  right,  and  to  countenance  only  that  which  is  right. 


Business   Practice   Bookkeeping 

Definitions  and  Discussions 

Art.  1.  The  Student  should  study  the  following  carefully.  These  definitions  explain 
many  of  the  more  common  terms  used  in  bookkeeping  and  they  should  be  familiar  to  the 
student. 

2.  Business,  in  its  mercantile  sense,  refers  to  the  interchange  of  values  between 
persons. 

3.  Bookkeeping  is  to  record  business  transactions. 

4.  There  are  two  principal  systems  of  bookkeeping:     Double  Entry  and  Single  Entry. 

a.  In  Double  Entry,   tivo  entries^  one  called  a  debit  and  the  other  a  credit  are 
made  to  every  transaction. 

b.  In  Single  Untry,  only   one  entry,  called  a  debit  or  a  credit  is  made  to  each 

transaction. 

5.  Al  Book  of  Original  Entry  is  one  in  which  the  business  transaction  is  first  re- 
corded; as,  /ournal.  Cash  Book,  Sales  Book,  and  hivoice  Book. 

6.  A  Principal  Book  is  one  from  which  or  to  which  entries  may  be  posted;  as,  /ournal, 
Cash  Book,  Sales  Book,  Invoice  Book,  and  Ledger. 

7.  An  Anxiliary  Book  is  one  in  which  entries  are  made  merely  for  reference;  as,  Bill 
Book,  Pass  Book,  Deposit  Ledger,  Ticklers,  etc. 

8.  Property  is  any  thing  of  value  capable  of  ownership;  as,  Cash,  Merchandise,  Real 
Estate,  Enrnit7ire  and  Fixtures,  Chattels,  Notes  Receivable,  etc. 

9.  By  Cash  is  meant  Currency,  Bank  Checks,  Bank  Drafts,  Bills  of  Exchange  payable  at 
sight,  and  all  other  commercial  paper  that  may  be  cashed  at  bank  without  discount. 

10.  By  Merchandise  is  meant  any  personal  property  bought  by  a  merchant  for  the  pur- 
pose of  selling  the  same  at  a  profit;  as,  Groceries,  Hardware ,   Dry  Goods,  etc. 

11.  Bv^  Real  Estate  is  meant  lands  and  improvements  thereon. 

12.  By  Eurniture  and  Fixtures  is  meant  the  interior  equipment  of  the  store;  as,  count- 
ers, shelving,  desks,  safes,  typewriters,  cash  registers,  adding  machines ,  filing  devices ,  etc. 

13.  By  C/zat^e/s  is  meant  all  other  personal  property;  as,  horses,  wagons ,  harness ,  platform 
scales,  trucks,  etc. 

14.  Notes    Receivable  are  written  promises  to  pay,  and  payable  to  us,  as,  promissory 

notes,  accepted  drafts,  and  due  bills. 

15.  Notes  Payable  are  written  promises  to  pay,  and  payable  by  lis. 


8  BUSINESS    PRACTICE    BOOKKEEPING 

16.  All  Account  is  a  record  of  one  or  more  business  transactions. 

17.  A  L/Cdgcr  Account  is  a  formal  record  of  the  items  relating  to  any  one  tit/r,  whether 
it  be  a  personal,  property,  or  allowance  account. 

18.  A  T^itle  is  the  heading  or  name  by  which  a  ledger  account  is  known  or  designated. 

19.  Accounts  Receivable  are  those  personal  accounts  which  show  a  debit  balance 
owing  to  the  proprietor  or  firm. 

20.  Accounts  Payable  are  those  personal  accounts  which  show  a  credit  balance  owed 
dy  the  proprietor  or  firm. 

21.  The  Proprietor  is  the  owner  of  the  business. 

22.  Partners  are  the  several  owners  of  a  business. 

23.  By  Persons  is  meant  the  people  with  whom  we  deal. 

24.  By  Resources  is  meant  all  available  properties  or  values;  as,  Cas/i,  Merchandise, 
Real  Estate,  Etirniture  and  Eixtnres,  Chattels,  Notes  Receivable,  Accounts  Receivable,  etc. 

25.  By  Itiabilities  is  meant  debts  or  obligations  to  pay;  as,  Notes  Payable  and  Accounts 
Payable. 

26.  By  lEiXpense  is  meant  any  allowance  made  in  carrying  on  the  general  business;  as. 
Rent,  Salaries,  Stationery,  Fuel  Bills,  Advertising,  etc. 

27.  An  Inventory  is  a  list  of  the  properties  owned  by  the  firm,  and  usually  consists  o'f 
Merchandise,  Real  Estate,  Eurniture  and  Fixtures,  Chattels,  etc. 

28.  A  liability  Inventory  sometimes  occurs  in  Notes  Payable  account,  in  Interest  Pay- 
able account,  and  in  an  unpaid  Expense  account;  as.  Unpaid  Rent,  Uyipaid  Salaries. 

29.  Interest  is  a  sum  paid  or  charged  for  the  use  of  money. 

30.  Discount  is  an  allowance  made  for  the  payment  of  a  debt  before'xt  is  due,  or  for  some 
other  consideration. 

31.  We  Debit  persons  when  they  owe  us.  By  Debit  is  meant  the  left  side  of  a  formal 
account. 

32.  We  Credit  persons  when  we  owe  them.  By  Credit  is  meant  the  right  side  of  a 
formal  account. 

33.  To  Poot  an  Account  is  to  add  the  items  and  place  the  totals  in  very  small  figures 
underneath. 

34.  To  Balance  an  Account  is  to  write  the  difference  between  the  footings  of  an  ac- 
count, on  the  less  side  in  red  ink;  rule,  and  write  equal  totals  in  black  ink.  The  difference  is 
brought  down  on  the  proper  side  in  black  ink  and  is  called  the  balance. 


^'  •  4  -» 'a     e 


Double   Entry  Bookkeeping 

To  the  Student 

35.  All  Business  pertains  to  Persojis,  Property,  or  Allowances. 

36.  There  are  three  classes  of  accounts: 

1.  Personal  Accounts. 

2.  Property  Accounts. 

3.  Allowance  Accounts. 

37.  Bj-  Persons  is  meant  the  people  with  whom  we  deal  in  business. 

38.  By  Property  is  meant  Cas/i,  Merchandise,  Real  Estate,  Chattels,  Office  Fixtures,  Notes 
Receivable,  Notes  Payable,  Bank  Stock,  etc. 

39.  By  Allowances  is  meant  Interest,  Discount,  Commission,  Brokerage,  Guarayity,  Ex- 
pense,  etc. 

40.  Journalizing  is  arranging  in  a  correct  manner  the  debits  and  credits  of  an  account. 

41.  Journal  Entries  may  have  : 

1.  One  Debit  to  One  Credit. 

2.  One  Debit  to  Tzco  or  more  Credits. 

3.  Two  or  more  Debits  to  Oyie  Credit. 

4.  Two  or  more  Debits  to  Two  or  more  Credits. 

42.  Persons,  )  C  Persons,  ) 
Property,  or  >      may  be  Debited,  to      I  Property,  or  >  Credited. 

Allowances      )  (  Allowances     ) 

43.  Fundamental  Principle :  The  Sum  of  all  the  Debits  must  equal  the  Sum  of  all 
the  Credits. 

PRINCIPI,:eS     OF     JOURNAI^I^ING 

44.  Pri?i.  J.  Persons  are  Debited,  or  charged,  when  they  receive  value  from  the 
business  and  do  not  return  an  equivalent. 

Prin.  2.     Persons  are   Credited  when  they  give  value  to  the  business  and  do  not 
receive  an  equivalent. 

Prin.  3.  Property  is  Debited  when  received  into  the  business. 

Prin.  4.  Property  is  Credited  vjhen  it  passes  from  the  business. 

Prin.  5.  Allowances  are  Debited  yv'h&n  made  by  the  business. 

Prin.  6.  Allowances  are  Credited  \Y\\&n  made  to  the  business. 

45.  The  word  Debit  means,  literally,  "to  charge  with  debt,"  and  in  that  sense  can  apply 
only  to  persons.  In  bookkeeping  the  term  is  also  applied  both  to  property  and  to  allowances,  and 
indicates  the  left  side  of  an  account. 

46.  The  word  Credit  means  "trust  given  or  received,"  and  in  that  sense  can  apply  only 
to  persons.  In  bookkeeping  the  term  is  also  applied  both  to  property  and  to  allowances,  and  in- 
dicates the  right  side  of  an  account. 


10 


BUSINESS    PRACTICE    BOOKKEEPIISiG 
APPI^ICATION    OF    PRINCIPI^ES 


r>AY    BOOK    KNTKV 


^^^-^^^4^ 


y:2-'gi^<^''A^  a-^-^y  iiiL^i>e>^  r/a  ^_ ._ 


JOURNAL    ENTRY 


/OO- 


'M£i 


Principle  1  applies,  and    Hall  is  debited  since  he  receives  value  without  returning  an  equiv- 
alent. 

Principle  4  also  applies.     Explain. 


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x/i2^ 


-^^=&' 


Sll- 


Principle  2  applies  and  King  is  <;7'^a'/7<:7/ since  he  gives  value  to  the  business  without  receiving 
an  equivalent. 

Principle  3  also  applies.     Explain. 


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7-^ 


^ 


Principle  5  applies  and  Expense  is  debited,  as  allowances  are  debited  when  made  by  us. 
Principle  4  also  applies.     Explain. 


'^;^f^^^^ 


/coa 


/^^^? 


Principles  1  and  4  apply.     Explain. 


^.s-D 


-^txS^ 


Principles  3  and  2  apply.     Explain. 


BC/S/NESS    PRACTICE    BOOKKEEPING 


11 


The  Receipt 

47.  A     Receipt    is    an    acknowledgment  of    having   received    the  whole  or  a  part  of 
something  specified. 

48.  There  are  many  forms  and  methods  used   in  acknowledging  the  receipt  of  value  from 
those  with  whom  we  deal.     Those  most  common  are  as  follows: 

1.  Receipt  for  the  payment  of  a  bill. 

2.  Receipt  for  a  partial  payment  on  a  bill. 

3.  Receipt  for  payment  on  account. 

4.  Receipt  for  payment  in  full  of  account. 

5.  Receipt  for  certain  credit. 

6.  Receipt  for  the  payment  or  partial  payment  on  notes  or  other  commercial  paper. 

FORM    OF    RFCFIPT 


llMBB)^jy    /'l/^^<^-^^X'<z2^<^^^^ 


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Ci^^^^^.^^^/^  ^^,^^^^^^^^^^ ^/u^/M4.4/(M/^^_^^ 


C-'>'J^^.^-^^^^  ^ 


JULIUS  WINTER  Jr.  &  CO. 


BY_ 


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Receipt  in  full  of  all  Demands. 


O  Copy  the  above  on  j'our  practice  blanks  and  hand  to  teacher.     After  criticism,  write  out  another  and 

hand  in  for  inspection  and  record. 


12 


BUSINESS    PRACTICE    BOOKKEEPING 


The  Bank  Check 

49.  The  Bank:  Check:  is  the  order  of  a  depositor  upon  his  bank  to  pay  a  third  party  a 
certain  sum  of  money  upon  demand. 

50.  Banks  receive  money  upon  deposit  subject  to  check,  thereby  facilitating  the  handling- 
of  a  large  number  of  cash  transactions  without  the  risk  and  trouble  of  transferring  the  actual 
currency. 

51.  Most  Check  Books  have  stubs  or  blank  ends  upon  which  a  record  of  each  check 
given  out  is  made.  These  stubs  should  be  filled  out  before  the  check  itself  is  written,  thus  in- 
suring a  correct  record  of  each  one. 

FORMS    OF    BANK    CHECKS 


/^Y^I^/.lS. 


To  THIRD  NATIONAL  BANK, 

ST.  LOUIS,  MO 


Mj. 


7b_ 
/■or_ 


J- 


./&/. 


m^       ^^         -;>  <^    A^  x/-^         y? 


'^^      b^/Z/^/^yu^ay^yi://^/. 


WjMr/J^  y^am 


Bal  bmughl-fbrw'd 
Amounf  deposited 

Total 
Amount  this  check 
Bal  carried  fbrw'd 

Q  Copy  all  three  of  the  above  checks  and  hand  to  teacher  for  criticism.     After  criticism,  recopy. 


BUSINESS    PRACTICE    BOOKKEEPING 


13 


The  Order  Sheet 

52.  The  Order  for  Goods  is  one  of  the  first  things  of  great  importance  to  be  considered 

in  business.     An  order  that  is  so  poorly  stated  that  it  leads  to  error  is  disappointing  to  both 
buyer  and  seller,  and  always  means  a  loss  to  some  one. 

53.  An  Order  Sheet  should  always  be  used,  especially  when  the  order  consists  of  several 
items,  and  instructions  regarding  terms,  manner  of  shipment,  routeing,  etc.,  are  given. 

54.  The  Order  Sheet  should  contain  room  for  the  following  essentials: 

1.  Names  and  addresses  of  both  btiyer  and  seller. 

2.  Both  Order  Number  and  Sale  Number. 

3.  Date  of  Order,  Terms,  How  Shipped,  Routeing. 

4.  Date  billed,  Date  Shipped,  Checked  by. 

5.  Items  of  the  order,  including  quantity,  and  a  plainly  legible  description  of  the 
goods  wanted, 

55.  The  following  order  is  a  good  form  to  use.  It  is  all  filled  out  by  the  buyer  except 
the  "Sale  No.,"  "  Date  Billed,"  "  Date  Shipped,"  "Checked  by,"  and  the  actual  checking  of 
items  as  they  are  assembled  by  the  shipping  clerk. 


Date  Billeq. 


Addr 


>fc-<zC.<y-g>^tzX"2^^^1a^-^^ 


(jiLiz...^^y 


Date  Shi/ped 

^/  ^  //C3 


% 


7.^yT^y^ 


Ordered  by         . </^.       ^  — >:5^^--'^-?g'..o^-^^' — ' 

To  Be  Shipped  to  ^^^::^e:g<^C-<^^-zZ-"7-z--z^    (_^<1-^^^ 


Ship  by   ^ — — • 


Checked  by 


^^^:^^ 


:i^^^y^  y^A.^T^i.-JA  r^Hr.^y 


J-JL. 


4U^-..->^:^^-z^^  r%r.j^ 


/.^    .    ^=£z^^^.^~^..^.^.^<^^^y^ 


Sweet's  Business  Practice  Bookkeepinsr 


ORDER  NO. 


Shipper's  No 


5^ 


^ 


TO 


//^  .        ---x^  x7  Date  of  Ordi 

^^     /7  ^  '  Te^ms  :     ^ 


Date  of  Order 


Date  BjiuEr 


I^HIPPEO 


AJdr 


^^Z^^^^  ^^/^ 


(^-■cz...^..^ 


Date^hipp 


Checi^ed  BV-O-  . 


Ordered  by 


?    BY        > ^ 


To  Be  Shipped  to  ~-Ji^'d^.--^^^yn^^,:C-t;Lyi^^zJ^^ 


fnn^^J^  -^^^^Tp'^wC^ 


'^^y 


diji. 


.^^^^^y  1^^^  rS^yu 


-^^^-^ 


^i:y^-iy-^...e^-^^ay~t^2^,^^i'-y^  xV^^^^^v^ 


'jf(?C?     <y-^ (f^-5?-^^.- -^j^^L^^^i-^Ji^ 


.Ajl 


-^'^i^- 


^^--i^-'f^. 


"^ 


C-tT-r^y^^^Z^^^ 


Q  Copy  the  above  word  for  word  and  figure  for  figure  and  hand    to    teacher.     After  criticism,  write  out 

another  and  hand  in  for  inspection  and  record. 


14 


BUSINESS    PRACTICE    BOOKKEEPING 


The  Bill  or  Invoice 

56.  The  Bill  or  Invoice  is  a  more  or  less  formal  statement  of  goods  sold  or  bought,  and 
usually  contains: 

1.  The  Names  and  addresses  of  both  seller  and  buyer. 

2.  The  Terms  of  the  sale,  discounts,  etc. 

3.  The  Sale  Niutiber  and  the  Buyer' s  Invoice  number. 

4.  How  Shipped  and  by  what  route. 

5.  Items,  quantity,  price,  extensions,  and  total  amount  of  bill. 

57.  To  Chech  Off  a  bill  is  to  place  a  check  (i  )  mark  at  the  left  of  each  item  when  the 
goods  arrive  to  make  sure  that  no  mistake  has  been  made  in  shipping,  and  that  no  shortage  or 
damage  has  occurred  enroute. 

58.  To  jReceipt  a  JBiii  is  to  write  or  stamp  "Paid"  or  " Received  Payment"  together 
with  the  firm's  signature  and  date  of  payment. 

59.  To  Give  Credit  on  a  bill  is  to  acknowledge  in  writing  on  its  face  any  "set  off"  that 
has  been  rendered. 


SALE   NUMBER 


SHIPPED   VIA 


terms:     60  DS., 

7f^(.   3  0   DS.;     B%.  CASH 


CABLE   ADDRESS 

"Cawco" 


COOES : 

A. B.C.   5tm  Edition 
WtsTCRN   Union 


TELEPHONE 

Wabash   842 


Business  Practice  BtooklteepinK 


ORDER  NUMBER 


SALESMAN 


CHECKED  BY.^ 


All  'Bills  payable  in  Chiago, 
S.  F.,  or  N.  Y.  Exchange. 


All  Bills  Not  Paid  When  Due 
Subject  to  Sight  Draft. 


No  Claims  aJlotved  after  fit>e 
days  from  arrival  of  goods. 


and    Descriiitii 


(oOO* Ad^<^y^<=Z^-^:t^^^  )C^_^^^^y>y 


/  ^co^^ 


o-c-c-^L^ 


/^■ro"^  -Co^J.'Jo^^^:^'9/:,^j^ 


.^S      Jl/0 


zjA 


/  c,jr 


/<f\  ^;^P 


^<^^ 


SALE   NUMBER 
^ 


SHIPPtO'VIA 


A/ I  A 


y^^ 


terms:  60  DS., 

2%.  30  DS.;  5%.  CASH 


CABLE  ADDRESS 

"COMMEX** 


TELEPHONE 


===ssa1  ryM/y//^/r,wloei 


r. 


f^mm^i  \ 


mwmm  mM  mm>.        ^jL<,^J-^zy^^.^yin^./. 


ORDER    NUMBER 


SALESMAN 


All  '^BHis  payable  in  Chicago 
or  Ne<w  York  Exchange. 


All  Bills  Not  Paid  When  Due 
Subject  to  Sight  Draft. 


No  Claims  allotued  after  five 
days  from  arrival  of  goods. 


/^•TOoi^        .,Jj^..i^^L^^  /^l<^^^^^?!^k^y 


.^ o  on* 


^,^^^^..,■1^ 


^ 


O  O' 


aji 


lA. 


Z2f 


j£s£0_ 


3  /S 


M. 


ff 


jC^ 


/^n   ^^.  f\. 


;^^?^^^^^^»»^-^^.^-igt^ig»/- 


^ 


s£0 


2S0 


:io  o    " 


i-^/e^  f^^^f-^Ci^t-^^^if-e^*/^^ 


:L5.. 


■^ 


i£^ 


/X2_^ 


.fO 


Bill  with  Advertisement. 


BUSINESS    PRACTICE    BOOKKEEPING 
Receipted  Bill  paid  in  Cash. 


15 


SALE    NUMBER 


SHIPPED-y/lA 


m 


^ 


'■Wy(J 


terms:     60  DS., 

^/c,  30  DS.;    5%.  CASH 


CABLE   ADDRESS 

"Cawco" 


CODES : 

A. B.C.  5th  Eoition 
WrsTERN   Union 


TELEPHONE 


Sweet's  Business  Practice  HookkeepinK  Form  Ko 

(Eljiragn.  M..     [j^^y  /    y3.- 


(EnmntFrrial  tM\\'m%t 


9olb  to 


ORDER    NUMBER 
>  A  lTs  I<  a  \(   ' 


All  'pills  payable  in  Chicago 
or  Netv  York  Exchange. 


All  Bills  Not  Paid  When  Due 
Subject  to  Sight  Draft. 


No  Claims  allo'wed  after  five 
days  from  arri'val  of  goods. 


and  Desciipti* 


Receipted  Bill  paid  by  Note. 


SALE   NUMBER 


SHIPPED  VIA 


^1 


terms:    60  DS., 

2     ,   30    DS.;     S     ,  CASH 


CABLE   ADDRESS 
"Chapco" 


TELEPHONE 

Wabash   842 


Bii-i.  HeXi>  Sweecs  Business  Practice  Bookkeeping  Form  No.  I 

Santa  Rosa,  Cal.,  \/^.<i^  /'^  '/.^ 


A.  6.  Chapman  &  Company 


268  Main  Street 


i*BlI>   tfl_ 


ORDER    NUMBER 


r^frr 


SALESMAN' 


'■n^ 


Jdl  'Bills  payable  in  Chicago, 
S.  F.,  or  N.  Y.  Exchange. 


All  Bills  Not  Paid  When  Due     ] 
Subject  to  Sight  Draft. 


No  Claims  allowed  after  five 
days  from  arrival  of  goods.        \ 


Uuantity    and    Description 


¥n 


J^A  /p'%^-4CX,../ 


v/-—     Jiao 


/.^ 


^'^^<.'■>ty  /Vt^^-tz^ 


^^i2 


^ 


£jO_ 


/j2, t^y-rr^.  /g^-^^t>^>£^l^.^ 


— Jj^-^. — ----,, 


jS', 


Aa 


/^ 


/  6r 


^  ^^^^\:r<:^ 


d^H. 


L^y^^,  ?a  ^J.><c^ 


'H- 


O  Copy  the  Bills  on  pages  14  and  15  and  hand  to  teacher  for  criticism.       Explain  ail  parts  of  each  Bill. 

After  corrections  have  been  made,  write  another  for  inspection  and  record. 


16 


BUSINESS    PRACTICE    BOOKKEEPING 


LOCAL  AND  LONG  DISTANCE 

TELEPHONES 

■WESTERN  UNION  AND  POSTAL 

WIRES 

USE  ROBINSONS  CODE 


MAIN  OFFICE 
ON  FIRST  FLOOR  OF 
GREENSBORO  HOTEL, 
CONVENIENT  TO  ALL 
AND  ALL  WELCOME 


PUOTATIONS   SUBJCCT 

TO  MARKET CHMGCS 

AND  SHIPPERS  CONFimmiON . 


lIEtitellPl^,  ^^ijt,  JL^o-^r  /y^. 


30   C-7g-<^^g-.^  fe<p-^z>^— ^<^^,-l^i£.^£^ 


/  }^  O 


^•£1 


/3y£- 


..Id. 


^^O 


.?ooa^  .  >  ^^,-^^^,-/,i^^.t<g-  C^^^^^j>y 


^ 


ooi 


>r<^g-^^.-.-.>-->^^^-ZZ-^  J^^4>--^^JES<^ 


v/<^-? 


f 


.£^ 


SA^E  NUMBER 


SHIPPED   VIA 


terms:     60  DS. 

2     .  30   DS.;     5     ,  CASH 


CABLE   ADDRESS 

"Cmapco" 


TELEPHONE 

W*B*SH    842 


Bill  Hbad  Sweet  s  Business  Practice  Bookkeeping  Perm  No.  1 

Santa  Rosa,  Cal.,. 


A.  6.  Chapman  ^  Company 

268  Main  Street 


^^g<^^g-^,<■^>^^-^^^;-'^Z^.ig:^ 


ORDER    NUMBC 


^S"^ 


m 


SALESJ^N 


/^-JX^ 


V^L^ 


CHECKED  BY 


^^tg 


M  'BaUpayaba  in  Chiaigo, 
S.  F.,  or  N.  Y.  ExcfuLnge. 


AU  BiUs  Not  Paid  Whtn  Dae 
Subject  to  Sight  Draft. 


No  Claims.allo'wed  after  fh>t 
days  from  arrmal  of  goods. 


Quantity    and   Descriptii 


r.o     ^J^. 


^fl^^'^i^^f-r^^y 


^_ZL 


.?  C^/7 


.JJL 


^^ 


V 


/^^ 


^./" 


{ /r>^--r>^^-i^y  //Lg^^^ 


dm 


//■^ 


,£La. 


^  ^  O --xpC^.     Ch^^^  -- 


2^. 


^ 


^^2 


^jC^ 


~^^zzs^^^^^^ 


^fi:L 


.£J2. 


"yfp^ti^  ^y^  ^'(^  £^^ 


3  0  0 


<^^^ 


^^0 


^^^ 


fA   )^-^-<Z2^f^L^i^'^^^-^y^ 


ngsr-r^OKSTt 


^  Copy  the  above  exactly  and  submit  your  work  for  inspection.     Then  write  out  another  identically  the 

same    except  the  Cash  payment  which  is  $200,  thereby  leaving  a  balance  of  $122.50. 

60.     The  Balance  is  the  net  amount  of  the  bill  yet  unpaid. 


BUSINESS  PRACTICE  BOOKKEEPING 


17 


The  Promissory  Note 

61.  A  Promissory  Note  is  a  written  promise  to  pay  a  certain  sum  of  money,  either  on 
demand  or  at  a  specified  time. 

62.  A  Promissory  Note  when  received  from  another  is  a  Note  Receivable;  when  given 
and  to  be  paid  to  another  is  a  Note  Payable. 

63.  Promissory  Notes  are  given  and  received  in  business  for  various  reasons,  and  in 
bookkeeping  are  considered  the  same  as  property. 

64.  The  Pace  of  a  note  is  the  amount  promised  to  be  paid;  the  Maker  is  the  party  who 
signs  it;  the  Payee  is  the  one  to  whom  the  money  is  promised  to  be  paid;  and  the  Indorser  is 
the  one  who  writes  his  name  on  the  back  to  make  it  transferable  or  to  guarantee  its  payment. 

65.  In  Writing  a  note,  check,  draft,  or  other  commercial  paper,  great  care  should  be 
given  to  legibility  and  accuracy.  The  figures  and  words  expressing  the  amount  to  be  paid 
should  be  exceedingly  plain  and  should  always  agree. 

Q  Practice  the  following  and  hand  in  a  full  page  of  your  best  work. 

^m^  f/^^^  J^^rr-^  Jy^i,J^  J-^r^t'  ^,^^"'^;fe^-T> 

Note —  In  the  above  it  will  be  noticed  that  the  Dollar  Sign  CI)  is  placed  close  to  the  figures,  and  that 
the  cents  are  easily  and  clearly  distinguished  from  the  dollars.  Also  note  the  different  ways  of  writing  the 
cents  and  in  closing  the  number  when  no  cents  are  expressed. 


Form  of  Promissory  Note. 


'OM^ 


^  //  ^9/S. 


■^'j^-^t^l-'^-z^-t:^ 


////!/ei^ii^Aay^a^e;^myy^^  UNITED  STATES  GOLD  COIN . 


Q  Copy  the  above  note  on  your    practice    blanks  and    hand  to  teacher.       After  criticism,  write  another 

i>nd  hand  in  for  inspection  and  record. 

SBT  I.,  INITIATORY  -  Part  First 

66.  Its  Purpose:     The  purpose  of  this  Initiatory  Set  is  to  prepare  the  student  for  the 
Actual  Business  Practice  of  the  succeeding  sets.     The  following  are  the  principal  features: 

1.  How  to  open  a  set  of  books  with  a  cash  capital.     4.  How  to  check  off  and  receipt  a  bill. 

2.  How  to  make  ordinary  Journal  entries  correctly.     5.   How  to  journalize  and  post. 

3.  How  to  prove  the  Cash  and  Bank  Accounts.  6.  How  to  take  a  Trial  Balance. 

7.  To  teach  the  correct  forms  of  Orders,  Bills,  Invoices,  Receipts,  Notes,  Checks,  etc. 

67.  Books  Used:     The  Journal  and  the  I^edger  are  the  principal  books  used.     The 
auxiliary  books  are  the  Deposit  Ledger,  Pass  Book,  and  Bala^ice  Book. 

68.  Home  Study:     Every  student  should  study  his  bookkeeping  text  at  home.       This 
will  help  him  to  get  a  right  start,  which  is  very  essential  to  rapid  and  thorough  advancement. 

69.  Forms  and  Entries:     Every  Form  and  Entry  should  be  carefully  noted  and  fol- 
lowed exactly. 

70.  The  Guides:     The  routine  of  work  as  set  forth  in  the  Guides  should  be  followed  to 
the  letter.     Every  deviation  will  prove  a  stumbling  block  and  retard  the  student's  progress. 


18  BUSINESS    PRACTICE    BOOKKEEPING 

GUIDE  NO.  1.     Initiatory  Practice 

71.  The  following  Memoranda  outlines  the  ^rstjive  days'  work  of  this  Set.  The  student 
will  make  the  entries  in  his  Practice  Books  copying  the  models  on  the  following  pages. 

72.  As  each  item  is  entered  place  a  pencil  check  (|/)  mark  in  the  small  circle  at  the  left. 
Student  and  teacher  will  then  know  the  true  progress  being  made.  This  check  mark  indicates 
that  the  Student  has  applied  and  understands  the  principles  involved. 

O  1-     Jan-    1,    1913,   A.    B.   Chapman  engages  in  the  Produce  Business  at  No.  444  Market 

St.,  San  Francisco,  and  invests  $3000. 

O  2.  Jan.  1.  Paid  one  month's  rent  of  store  in  cash,  $100. 

O  3.  Jan.  1.  Paid  for  stationery  for  office  use  in  cash,  $10. 

O  4.  Jan.  1.  Bought  for  cash.  Office  Safe,  $70;  Office  Desk  and  Chair,  $20. 

O  5.  Jan.  1.  Deposited  in  College  National  Bank,  Cash  $2800. 

O  6.  Jan.  1.  Bought  of  Com'l  Exchange  for  cash,   Mdse.  per  Invoice  No.  3,  $1121.25. 

O  7.  Jan.  2.  Paid  for  advertisement  in  daily  paper  by  check  No.  2,  $12.50. 

O  8.     Jan.  2.     Sold  E.  V.  Grant  for  cash:     20  bbls.    Flour   @  $5;    10  bbls.  Rolled  Oats  @ 

$4;  15  bbls.  Corn  Meal  @  $2.50. 

O  9.     Jan.  2.     Sold   D.   M.   Bryant,  for  cash:   15  bbls.  Corn  Meal  @  $2.50;  180  doz.  Eggs 

@  25^;  12  doz.  Poultry  @  $5. 

O         10-     Jan.  2.     Bought  of  Com'l  Exchange  on   30  ds.  credit,    Mdse.    per  Invoice  No.  5, 

$1824.50. 

O         11.     Jan.  2.     Sold  I.  J.  King  on  30  ds.    credit:     600#  Butter   @    35^;   1200#  Cheese  @ 
14^;  1480#  Hops  @  15^. 

O         12.     Jan.  3.     Bought  of  M.  N.  Long  on  15  ds.  credit,  Mdse.  per  Invoice  No.  6,  $217.50. 

O         13.     Jan.  3.     Bought  of  A.  J.  Fuschia  for  cash,  Mdse.  per  Invoice  No.  7,  $304. 

O         14.     Jan.  3.     Sold  R.  S.  Tanner  on  30  ds.  credit:     40  bbls.  Flour  @  $5;    20  bbls.  Rolled 

Oats  @  $4;  40  ctls.  Onions  @  $2.65;  80  ctls.  Potatoes  @  $1.40. 

O         15.     Jan.  3.     Sold  U.  V.  Willard  for  cash:     30  bbls.    Corn  Meal  @  $2.50;  360  doz.  Eggs 
@  25^;  12  doz.  Poultry  @  $5;  600#  Butter  @  35^. 

O         16.     Jan.  4.     Bought  of  M.  N.  lyong  for  cash,     Mdse.  per  Invoice  No.  8,  $528. 

O         17.     Jan.  4.     Bought   of  X.  Y.  Zaner  on  30  ds.  credit,     Mdse.  per  Invoice  No.  9,  $360. 

O         18.     Jan.  4.     Paid  Commercial  Exchange  on  account  by  check  No.  5  on  College  National 
Bank,  $824.50. 

O         19.     Jan.  4.     Paid  M.  N.  Long   for  Invoice  No.  3  by  check  No.  6  on  College  National 
Bank,  $217.50. 

O         20.     Jan.  5.     Sold  Commercial  Exchange  for  cash:     20  bbls.  Flour  @  $5;  10  bbls.  Rolled 

Oats  @  $4;  15  bbls.  Corn  Meal  @  $2.50;  540  doz.  Eggs  @  25^;   18  doz.   Poultry   @  $5.     Our 

bill  being  correct,  the  Commercial  Exchange  pays  1  %  additional. 
O         21.     Jan.  5.     I.  J.  King  paid  us  cash  on  account,  $200. 

O         22.     Jan.  5.     Paid  X.  Y.  Zaner  on  account  by  check  No.  7  on  College  National  Bank$,  160. 
O         23.     Jan.  5.     Sold  Commercial  Exchange  on  acct.  30  ds.:     900#  Butter  @    35^;    1800# 

Cheese  @  14^;   1480#  Hops  @  15^;   40  ctls.  Onions  @  $2.65;   80  ctls.  Potatoes  @  $1.40. 

Correct.     1  %  added. 

O         24.     Jan.  5.     Ordered  of  Wright  &  Co.,  San  Francisco:     30  cases  Eggs;   30  doz.  Poultry; 
1500#  Butter;  60  50#  Cheeses;  20  bales  Hops. 

O         25.     Having  completed    all    the    preceding    twenty-four    entries    and  journalized  them 
properly,  you  may  now  post  the  same  to  the  Ledger. 

O         26.     Take  a  Trial  Balance,  prove  and  rule  your  Cash  Account. 


BUSINESS    PRACTICE    BOOKKEEPING 


19 


73.  The  following  models  are  given  to  assist  the  student  in  learning  the  elementary 
forms  and  principles  of  bookkeeping.  He  is  to  copy  these  models ,  and  study  W\€\x  forms  that  he 
may  soon  be  able  to  make  correct  entries  without  having  to  refer  to  them. 


Wa^'T^.^c^c^^ttyiyuy/,  /^/-^ 


Model 
i5irtrf- 


-Eir 
No.  1. 


Mode. 


Model 


Model 
No.  4, 


^,.^^>^-L^^A^^r-7^<<'C^y'^ 


^c?^^^- 


^JJ^Az^^ 


f^,^ 


/^^t2,<0^    C^-^Sl^^^^^Xl.-^^:^:?-^^ 


rrx^l 


f.?-- 


^.^ 


^^^^y1^^J^^y1j%^    '^y 


^•^r^^^ 


,-i^.*8fi^^ 


3  i^iLO. 


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BUSINESS  PRACTICE  BOOKKEEPING 


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BUSINESS  PRACTICE  BOOKKEEPING 


21 


Alodel  20. 


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22 


BUSINESS  PRACTICE  BOOKKEEPING 


THE   MAIN  I^BDGBR 

74.  To  the  I/Cdger  are  transferred  all  the  debits  and  credits  of  the  /o2irna/,  each  under 
its  proper  heading.  Thus  all  the  Cas/i  debits  found  in  \\\^  Journal  are  transferred  to  the  debit  of 
the  Cash  Account  in  the  lyedger,  and  all  the  Cash  credits  are  transferred  to  the  credit  of  the  Cash 
Accowit  in  the  I^edger. 

75.  In  the  same  manner  the  Mdse.  debits  are  transferred  to  the  debit,  and  the  Mdse.  credits 
are  transferred  to  the  credit  of  the  Mdse.  Account  in  the  Ledger.  In  fact,  all  debit  and  credit 
items  of  the  /our?ial  are  transferred  to  the  Ledger,  each  under  its  proper  title  or  heading. 

76.  Posting  is  the  act  of  transferring  any  item  from  a  book  of  original  entry  to  the 
Ledger. 

77.  Instructions  in  regard  to  posting: 

1.  Remember,  that  Debit  means  the    left  side  or  column,  and    Credit   means   the 
right  side  or  column  of  an  account. 

2.  Post  at  the  close  of  each  day's  work,  when  the  day's  work  is  fresh  in  the  mem- 
ory, and  if  improper  entries  or  mistakes  have  been  made  they  may  be  easily  corrected. 

3.  Post  all  the  Debits  first,   and  be  sure  to  check  each  one.     Then  post  all  the 
Credits.     Never,  7iever  forget  to  check  in  both  Journal  and  Ledger. 

4.  Next  foot  all  accounts  in  very  small  lead  pencil  figures.     Place  these  figures 
close  up  to  the  line  so  that  they  will  not  interfere  with  subsequent  postings. 

5.  Do  not  skip  lines  in  posting.     Every  line  should  be  used  as  far  as  the  numbers 
require,  and  red  ink  balances  are  always  written  on  the  next  line  below.     See  Cash  Account. 

78.  C/iecti/i^  consists  in  placing  \he  Journal  folio  or  page  number  in  the  check  column 
of  the  Ledger  and  the  Ledger  folio  (l.  f.)  or  page  number  in  the  check  column  of  the  Journal. 
See  Models. 


CE.^ 


BUSINESS  PRACTICE  BOOKKEEPING 


23 


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24 


BUSINESS  PRACTICE  BOOKKEEPING 


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J  60 


BUSINESS  PRACTICE  BOOKKEEPING 


25 


The  Trial  Balance 

79.  A  Trial  Balance  is  a  summary  of  the  footings  of  all  the  accounts  in  the  Ledger. 
The  debit  footings  are  placed  in  the  debit  column  and  the  credit  footings  in  the  credit  column  of 
the  trial  balance.  When  the  sum  of  the  debit  footings  equals  the  sian  of  the  credit  footings,  the 
books  are  said  to  be  in  balance. 

80.  The  Trial  Balance  consists  of  six  parts 

1.  Heading;  as,  ''Set  I.,  Trial  'Balance,  fan.  1913.'" 

2.  The  Ledger  pages  or  folios. 

3.  The  Ledger  Titles  or  accounts. 

4.  The  Debit  Footings  from  the  Ledger. 

5.  The  Credit  Footings  from  the  Ledger. 

6.  The  Totals  of  both  debit  and  credit  columns. 

Note — No  Trial  Balance  will  be  considered  complete  without  all  of  the  above.' 


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HOW    TO    FIND    :RRR0RS    IN    A    TRIAI,    BAI^ANC^ 

81.     How  to  find  Errors  when  the  Trial  Balance  does  not  balance: 

1.  See  that  the  former  balance  of  balances  is  in  balance. 

2.  Be  sure  that  the  additions  are  correct. 

3.  Find  the  exact  amount  out  of  balance,  then  look  for  it  and  its  one-half  among 
the  Ledger  items. 

4.  If  the  error  is  9  or  a  multiple  of  9,  look  for  reversed  figures  or  for  figures 
written  in  wrong  columns. 

Example. — 65  written  56  would  make  a  difference  of  9;  57  written  75  would  make  adifference 
of  2  times  9,  or  18;  63  written  36  would  make  a  difference  of  27,  etc.  This  may  occur  in  any  or  all  columns. 
Fifteen  dollars  written  fifteen  cents,  would  make  a  difference  of  |14.85,  which  is  divisible  by  9.  Fifteen  cents 
written  fifteen  dollars,  would  make  the  same  difference.  Subtracting  the  85  cents  from  JLOO  will  give  the 
number  wrongly  written.     This  will  apply  to  any  number  written  in  any  column. 

5.  If  there  is  an  error  of  1  in  any  column,  look  for  errors  in  addition. 

6.  If  the  error  is  small,  look  for  it  in  Interest,  Discount,  Collection,  or  Exchange. 


26  BUSINESS  PRACTICE  BOOKEEPING 

7.  Examine  the  Bills  Receivable  and  Bills  Payable  accounts,  and  note  that  the 
Debit  and  Credit  entries  are  exactly  alike  as  far  as  entered  on  both  sides. 

8.  See  if  your  cash  account  in  the  Ledger  or  Cash  Book  agrees  with  your  Deposit 
Ledger  plus  cash  on  hand . 

9.  If  the  error  is  in   the  cents'    column,  it  is  not    necessary  to  add  the  dollars' 
column. 

10.  If  the  above  tests  will  not  indicate  to  you  the  errors,  it  will  be  necessary  for 
you  to  re-check  every  item  from  the  previous  balance  of  balances.  Do  not  go  over  the  work 
without  checking;  you  will  waste  your  time  if  you  do.  Make  your  check  marks  very  light,  that 
they  may  be  easily  erased.  Many  times  errors  are  located  from  their  amounts;  a  very  large 
•error  can  be  found  only  in  a  correspondingly  large  entry. 

11.  Correct  a  ledger  entry  by  drawing  a  red  line  through  the  figures  of  the  error, 
and  then  making  the  correct  entry. 

12.  Journal  entries  are  corrected  by  checking  the  wrong  entry,  and  then  making 
a  new  one. 


Banks  and  Business 


A  Sank  is  an  institution  chartered  by  law  to: 

1.  Receive  Deposits, 

2.  Loan  Money, 

3.  Discount  Commercial  Paper, 

4.  Sell  and  Cash  Bills  of  Exchange, 

5.  Make  Collections, 

6.  And  in  the  case  of  National  Banks,  to  issue  bank  bills,  or  National  Bank  currency. 

There  are  two  classes  of  banks,  viz:     National  Banks  and  State  Banks. 

A  National  Bank  is  one  that  is  chartered  under  the  laws  of  the  United  States  and  has 
certain  privileges  not  granted  to  state  banks. 

A  State  Sank  is  one  that  is  chartered  under  the  laws  of  the  state  in  which  it  is  located. 

A  Savings  Bank  is  a  bank  which  makes  a  specialty  of  receiving  deposits,  large  or  small, 
on  which  it  pays  interest.  Banks  of  savings  only,  do  not  do  a  regular  commercial  business,  but 
loan  their  money  only  on  the  best  real  estate  and  collateral  security. 

The  Officers  of  a  bank  are  the  President,  Vice-President,  Secretary,  Cashier,  and  Tellers. 
Their  duties  will  be  fully  described  under  the  subject  of  Banking  proper. 

The  following  discussions  pertain  only  to  the  relation  of  the  depositor  to  his  bank,  especially 
as  regards  his  personal  account  and  how  to  keep  it  correctly. 


BUSINESS  PRACTICE  BOOKKEEPING 


27 


DEPOSITOR'S  BANK    ACCOUNT 

82.  The  Depositor's  Bank  Account  should  be  kept  with  great  care  as  it  not  only 

shows  his  balance  in  bank  at  all  times,  but  is  also  a  check  against  errors  in  his  regular  cash 
account. 

83.  There  are  four  things  to  be  considered  in  keeping  an  account  with  a  bank:  The  De- 
posit Slip,  the  Pass  Book,  the  Checks,  and  the  Deposit  Ledger. 

Deposit  Slips 

84.  Upon  the  Deposit  Slips  are  entered  all  the  items  of  any  deposit  at  the  time  of  mak- 
ing it.  The  Deposit  Slip  is  handed  to  the  Receiving  Teller  with  the  currency,  checks,  or  other 
paper  deposited  as  Cash.  This  he  will  enter  in  the  Pass  Book,  which  is  returned  to  the  depositor. 

85.  Under  the  titles  Go/d  Coin,  Silver,  Bank  Notes,  Checks,  etc.,  the  amount  of  each  of 
these  several  items  is  written. 

86.  Should  a  check  or  draft  from  a  distance  be  deposited  the  collection,  if  any,  should  be 
deducted  from  the  total  amount. 

FORM    OF    D:ePOSIT    SI/IP 

87.  The  following  directions,  taken  from  a  Pass  Book  of  a  local  bank,  are  excellent: 


PLEASE   LIST    EACH   CHECK  SEPARATELY 


Dollars 


BanhJiotes 
Gold 

Silvet 


yZl.ft-z^  ^ — (^yfU^A-fU^^T^. 


^Q^^ 


v^^i^^L^ 


^ 


^ 


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.r^vjT 


Instructions  to  Depositors 

To  save  time  and  guard  against  error  and  fraud 
our  depositors  are  requested: 

To  fill  out  their  own  deposit  slips. 

To  deposit  their  Pass  Books  for  monthly  settle- 
ment. 

To  notify  us  of  any  errors  as  early  as  possible 
after  their  Pass  Books  are  returned  to  them  or 
statements  of  their  account  made  to  them,  as  it  is 
necessary  that  we  be  immediately  informed  of  all 
losses  resulting  from  mistakes,  forgeries,  or  other 
CAUSES,  in  order  to  protect  our  customers  and  our 
own  interests.  We  cannot  be  held  legally  responsi- 
ble for  losses  .unless  the  parties  sustaining  them  use 
DUE  DiLLiGENCE  in  protecting  themselves. 

As  a  further  safeguard  we  would  suggest  that 
you 

Draw  all  checks  from  your  own  book. 

Number  your  checks  in  regular  succession. 

Write  plainly.  Use  good  black  ink  and  allow  it 
to  penetrate  the  fibre  of  the  paper  before  blotting. 

Begin  the  writing,  also  the  figfures,  close  to  left 
hand  margin  and  leave  no  blank  space  for  addi- 
tions OR  alterations.  See  that  figures  corre- 
spond with  the  body  of  the  check  and  that  the  dol- 
lars are  plainly  separated  from  the  cents. 

Keep  your  check  book  in  your  own  possession. 


28 


BUSINESS    PRACTICE    BOOKKEEPING 


The  Pass  Book 

88.  The  Pass  Book  contains  a  depositor's  account  with  the  Bank,  and  is  given  him  for 
reference.     It  also  answers  as  a  receipt  for  deposits. 

89.  When  a  depositor  wishes  to  place  his  money  in  a  bank  the  Cashier  or  the  Receiving 
Teller  requires  him  to  write  his  signature  in  the  Signature  Book  or  on  a  Signature  Card.  This 
is  done  so  that  the  bank  officers  may  have  it  for  reference.  The  depositor's  naine  is  then  entered 
in  the  Pass  Book  together  with  the  amount  of  the  deposit.  Deposits  are  entered  upon  the  credit 
side  of  the  Pass  Book,  and  checks  upon  the  debit  side. 

Note — Some  banks  enter  the  deposits  upon  the  debit  side  of  the  Pass  Book  and  the  checks  upon  the 
credit.  This  is  immaterial.  In  this  work  the  Pass  Book  is  considered  as  containing  the  bank's  account  ivith 
the  depositor,  and  therefore  credits  him  for  his  deposits  and  debits  him  for  the  checks  he  draws  on  the  bank. 

90.  Pass  Books  should  be  left  with  the  bank  a  few  days  each  month  in  order  that  they 
may  be  "written  up." 

91.  To  write  up  a  Pass  Book  is  to  enter  the  checks,  balance,  and  rule  the  account.  The 
bookkeeper  of  the  bank  does  this  work. 

92.  The  Balance  of  the  Pass  Book,  when  "written  up,"  should  show  the  amount  of  money 
the  depositor  has  in  bank. 

FORM     OF    PASS    BOOK 

93.  The  form  of  the  Pass  Book  is  much  like  that  of  the  Deposit  I^edger  and  is  as  follows: 


COLLEGE  BANK    In  Acct  With 


J7^«::^::^;;^:2±l2^:::±l:_- 


/f/3 


^0~th£UiJt 


^U.  II 


.-// JT- 


S'2.^sc 


so 


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fj-^ 


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•ss 


The  Check  Book 

94.  A  Bank    Check  is  an  order  by  a  depositor  upon  his  bank  to  pay  a  certain  sum  of 
money  to  bearer  or  to  some  specified  person,  firm,  or  corporation. 

95.  Checks  made  payable  to  Cas/i,  Freight,  Bank  Stock,  Mdse.,  etc.  are  transferable  with- 
out endorsement. 

96.  To  Indorse  a  check  the  payee  should  write  his  name  across  the  back  of  it  exactly  as 
it  is  written  in  the  check. 

97.  Checks  are  given  and  received  as  Cash.    They  are  usually  put  up  in  books  of  twenty- 
five  or  more  with  their  corresponding  stubs. 

98.  A  Cashier  Certifies  a  Check  by  writing  or  stamping  the  word  "Good"'  or  the  word 
Certified^'  across  its  face  and  signing  the  name  of  the  bank,  and  himself  as  cashier. 


BUSINESS    PRACTICE    BOOKKEEPING 


29 


99.  Great  care  should  be  taken  in  making  out  checks.  The  writing  should  be  perfectly- 
legible  and  the  figures  large  and  plain.  An  error  should  never  be  corrected  by  writing  one  fig- 
ure upon  another.  A  new  blank  should  be  used  if  the  error  is  a  bad  one.  As  a  rule,  checks 
should  not  be  given  to  strangers, 

100.  Upon  the  stubs  from  which  the  checks  are  detached  when  given  out,  are  written  the 
date,  amount,  name  of  payee,  etc.,  of  each  check  for  future  reference. 


JVh 

.If 

rp/ 

7b 

/'hr 

Bal  broughrfbrw'd 

0OU.ARS. 

CENTS 

Amounf  deposited 
Tolal 

Bal  carried  fbmfd 

L^^itf^i^^^^^f^Z^^^^^^y^^^^S^::^^^ 


Common  Form  of  Bank  Check  with  Stub. 


Counter  Check  for  Customers. 


fte«i|dEa:c^L 


y"/    (  z 


/MANUFACTURERS  OF 

^         S0rati?EDWlN3a|p^AT\F^0^^ 
Corn  Meajl,  Bran,  Chops,  £jc. 


'J~     ^Ji^^^-TlS-^ 


■o  BANK  OF  Advance, 


ADVANCE.   MO. 


THE  STODDARD  COUNTY  MILLING  CO. 


Per 


Check  with  Name  of  Firm  and  Advertisement. 


30  BC/S/NESS  PRACTICE  BOOKKEEPING 

The  Deposit  I/Cdger 

101.  The  Deposit  I^edger  contains  a  depositor's  account  with  the  Bank.  It  has  /oztr 
money  columns:  One  Pern  column  for  itemized  depgsits;  one  Tota/  column  for  the  sums  of  the 
deposits;  one  C/ieck  column  for  checks  drawn  on  the  Bank;  one  Toia/  column  for  check  footings. 

FORM    OF    DFPOSIT    I^FDGFR 


^-^    X::^'rC^^^^Z'-l!Z^^^P-^^ 


In  Account  Wit/i  COL,LEGE  BANK 


IN  FAVOR  OP 


^^Wiy  (^^z^^J^W*^ 


V- 


J  /  :i/  X 


-i-:i 


^sui 


3  0  4 


SjLji 


S'fi^^^^ 


^^ 


J/ 6 /yd' 


&1. 


to 


7^/>c^ 


HOW    TO    KFFP    THF    DEPOSIT    I^FDGFR 

102.  In  the  Item,  column  upon  the  debit  side  of  the  Deposit  Ledger  is  entered  each  de- 
posit in  detail,  and  the  sum  is  placed  in  the  total  column.  This  should  be  copied  from  the 
Deposit  Slip  before  the  deposit  is  made. 

103.  In  the  Item  column  upon  the  credit  side  is  entered  each  check  drawn  by  the  depositor 
together  with  name  of  payee  and  number  of  each  check.  At  the  close  of  the  day  or  week,  this 
side  of  the  Deposit  Ledger  is  made  up  from  the  stubs  of  the  check  book.  The  balance  should 
show  the  amount  of  cask  in  ba?ik.^ 

104.  To  Balance  the  Deposit  Ledger,  enter  the  difference  in  red  ink  on  the  credit  side, 
unless  it  be  an  overdraft,  and  rule  as  shown  in  model. 

105.  If  there  be  an  overdraft,  write  the  word  ' '  Overdraft' '  instead  of  '  'Balance' '  on  the 
debit  side  in  red  ink.    After  ruling,  bring  the  ' '  Overdraft' '  down  on  the  credit  side  also  in  red  ink. 


BUSINESS    PRACTICE    BOOKKEEPING  .31 

The   Cash    Account 

106.  The  Cash  Account,  whether  kept  in  the  Main  Ledger  or  in  a  Cash  Book,  is  one  of 
the  most  important  accounts  in  bookkeeping.  A  student's  success  or  failure  is  measured  largely 
by  his  ability  to  keep  his  cash  account  correctly. 

107.  Banks,  wholesale  offices,  commission  houses,  and  all  large  business  firms  balance  and 
rule  their  cash  accounts  every  day.  In  this  work  the  student  will  balance,  rule  and  prove  his 
cash  as  the  ''Guides''  direct. 

108.  To  Balance  the  Cash  Account  write  the  difference  of  the  footings  on  the  less  side  in 
red  ink,  rule  and  write  totals  as  in  model,  writing  the  Balance  below  in  black  ink  on  the  greater 
side.     See  Cash  Account,  page  22. 

109.  If  the  Debit  side  of  the  Cash  Account  is  the  greater,  the  balance  will  be  Cash  on  Hand 
or  in  Bank.  If  the  Credit  side  of  the  Cash  Account  is  the  greater,  the  balance  will  represent  an 
Overdraft. 

110.  To  Prove  Cash  is  to  reconcile  the  Cash  Account  in  the  Ledger  or  Cash  Book  with 
the  Cash  on  hand  and  in  Bank. 

111.  These  accounts  are  reconciled  when  the  cash  on  hand  equals  the  difference  between 
the  balatice  of  the  Cash  Account  and  the  Bank  Balance  as  shown  by  the  Deposit  Ledger. 

112.  The  sum  of  the  cash  on  hand  and  in  bank  should  equal  the  balance  of  the  Cash  Ac- 
count in  the  Ledger. 

113.  If  there  is  an  overdraft  on  the  bank,  the  sum  of  the  Cash  on  hand  and  the  balance  as 
shown  in  the  Cash  Account  should  equal  the  amount  of  the  overdraft. 


SET    I.,     INITIATORY-Part  Second 

114.  Its  Purpose:  The  purpose  of  Part  Second  of  this  Set  is  to  give  furthef^practice 
upon  the  forms  and  principles  of  journalizing,  and  introduces  the  following: 

1.  Promissory  Notes. 

2.  Notes  Receivable  and  Notes  Payable  Accounts. 

3.  Sale  for  Cash  and  Notes. 

4.  Remittance  by  Bank  Draft,  paying  Exchange. 

5.  Inventories  of  Mdse.,  Expense,  Furniture  and  Fixtures,  and  Chattels. 

6.  The  Balance  Sheet. 

7.  How  to  close  the  Ledger. 

8.  Balance  of  Balances. 

115.  Great  Care  should  be  given  to  exactness  and  accuracy  in  making  the  entries  out- 
lined in  the  following  memoranda. 

116.  Frequent  reference  to  the  models  already  given  should  be  made,  as  the  student  must 
rely  upon  his  own  judgment  and  previous  information  when  making  entries  or  in  posting. 

117.  Ruling:  Leave  tzvo  line  spaces  between  all  Journal  entries  and  r7(le  in  red  ink  as 
in  models. 

118.  Dating:  Write  the  name  of  the  month,  day,  and  year  at  the  top  of  each  page  in 
the  Journal,  and  be  sure  to  date  each  entry  either  in  the  center  between  the  red  Hues  or  at  the 
left  side. 


o 

1. 

o 

2. 

o 

3. 

o 

4. 

o 

5. 

o 

6. 

o 

7. 

32  BUSINESS    PRACTICE    BOOKKEEPING 

GUIDB    NO,   1,    Initiatory  Practice-Continued 

119.     Refer  to  previous  models  frequently  to  get  the  exact  forms  of  entries.     Go  slowly  and 
carefully.  As  each  item  is  entered  in  the  Journal  place  a  check  (i/)  mark  in  the  circle  at  the  left; 

/an.  8     .Rec'd  goods  ordered  of  Wright  &  Co.,  Chicago,  Invoice  #10,  $1639.50. 

Paid  freight  on  Inv.  #10  By  Check  #8,  $16.40.     Mdse.  Dr.  to  Cash  Cr. 

Drew  Cash  from  Bank  for  Office  Use,  $20.     No  Journal  enUy . 

Paid  Rent  of  Post  Office  Box  in  Cash,  $1;  Postage  Stamps,  25^;  Envelopes,  etc.,  25^. 

Bo't  Horse,  Harness,  and  Wagon  for  delivery  purposes,  by  Check  #9,  $205.    Chattels. 

Bo't  of  ly.  S.  Goodyear  on  acc't.,  30  ds.,  Mdse.  per  Inv.  #12,  $292.50. 

Sold  A.  D.  Hill  for  Cash:     600#  Cheese  @  14^;  1480#  Hops  @  15^;  40  ctls.  Onions 
@  $2.65;  40  ctls.  Potatoes  @  $1.40. 

O  8.    Jan.  9.     Paid  for  Printing,  in  Cash,  $3.50. 

O  9.     Bo't  of  I.J.  King  on  acct.,  30  ds.,  Mdse.  per  Inv.  #14,  $378. 

O         10.     Sold  R.  E.  Porter  on  acct.,  15  ds.:   20  bbls.  Rolled  Oats  @  $4;  360  doz.  Eggs  @  25<^- 
300#  Butter  @  35^;  740#  Hops  @  15^. 

O         11.     Bo't  Coal  for  Office  Use,  for  Cash,  $15. 

O         12.    Jan.  10.     Sold  M.  N.  Long  on  his  Note  at  30  ds.  without  Int.:     40  bbls.   Flour  @ 
$5;  15  bbls.  Corn  Meal  @  $2.50;  12  doz.  Poultry  @  $5;  1200#  Cheese  @  14^. 

O         13.     Bo't  of  A.    L.   Miller  by  Check:     1480#  Hops  @  15^;  60  ctls.  Onions  @  $2.65;  80 
ctls.  Potatoes  @  $1.40;  Mdse.  per  Inv.  #16. 

O         14.     Ordered  of  Com'l  Exchange:     100  bbls.  Flour;  50  bbls.  Rolled  Oats;  75  bbls.  Corn 
Meal:  100  ctls.  Onions;  200  ctls.  Potatoes. 

O         15.     Remitted  Com'l  Exchange  on  acct.  by  Draft  on  Chicago  Bank:  Face  of  Draft  $1000: 
Exchange  $2.50. 

O         16.     Rec'd  of  R.  S.  Tanner  on  acct.:     Cash  $400. 

O  17.  Jan.  11.  Sold  Com'l  Exchange  for  Cash:  300#  Butter  @  35^;  1200#  Cheese  @  14|^; 
1480#  Hops  @  15|^;  60  ctls.  Onions  @  $2.65;  80  ctls.  Potatoes  @  $1.40.  Add  1%. 

Gave  Wright  &  Co.  on  acct.:     My  Note  at  30  ds.  with  Int.  at  6  %,  $1000. 

Rec'd  of  I.  J.  King,  Check  to  balance  acct.,  $22. 

Bo't  of  E.  S.  Goodyear  on  acct.  15  ds.:     Mdse.  per  Inv.  #17,  $532.50. 

Rec'd  Goods  ordered  of  Com'l  Exchange  per  Inv.  #18:   $1306.25. 

Paid  freight  on  Inv.  #18  by  Check:     $13.05. 

Jan.  12.     Rec'd  of  R.  S.  Tanner,  his  Check  to  bal.  acct.  $98. 

Sold  I.  J.  King:     60  bbls.   Flour  @  $5;    30  bbls.   Rolled  Oats  @  $4;   45  bbls.  Corn 
S2.50;  360  doz.  Eggs  @  25^.   Rec'd  his  Note  at  60  ds.  with  Int.  at  6  %,  $300;  Check 
for  balance,  $322.50. 

O  25.  Sold  Com'l  Exchange  on  acct.,  30  ds.:  80  bbls.  Flour  @  $5;  50  bbls.  Rolled  Oats 
@  $4;  90  bbls.  Corn  Meal  @  $2.50;  180  doz.  Eggs  @  25^;  12  doz.  Poultry  @  $5.  1  % 
added,  $9.30. 

O  26.  Having  completed  the  work  as  outlined,  the  Student  will  post,  take  a  Trial  Balance, 
and  prove  his  Cash  Account  with  his  Deposit  Ledger.     See  pp.  35  and  39. 

O  27.  The  next  step  will  be  to  make  out  a  complete  Inventory  of  Merchandise,  Furniture 
and  Fixtures,  Chattels,  Expense  Items,  Notes  Receivable,  and  Notes  Payable. 

O  28.  A  Balance  Sheet  complete  should  now  be  made  to  ascertain  the  Net  Eossor  Net  Gain 
of  the  business  to  date.     See  discussion  and  model. 

O  29.  The  last  step  is  to  Close  the  Ledger.  Study  this  feature  and  master  it  as  soon  as  po.«;- 
sible.     It  comes  regularly  at  the  close  of  each  set. 


o 

18. 

o 

19. 

o 

20. 

o 

21. 

o 

22. 

o 

23. 

O         24. 
Meal  @ 

BOS/NBSS  PRACTICE  BOOKKEEPING 


33 


The  Inventory 

120.    The  Inventory  at  the  close  of  this  set  consists  of  the  following: 


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34 


BUSINESS    PRACTICE    BOOKKEEPING 

The  Main  Ledger 


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BUSINESS    PRACTICE    BOOKKEEPING 


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BUSINESS    PRACTICE    BOOKKEEPING 


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BUSINESS    PRACTICE    BOOKKEEPING 


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BUSINESS  PRACTICE    BOOKKEEPING 


39 


OATE 


^TTJT 


Bank  Account 

121.  Jt  is  absolutely- 
necessary  that  an  accur- 
ate account  with  the  '/n 
Bank  be  kept.  All good/^''^ 
business  managers  know 
that  without  a  true  and 
positive  knowledge  of  the 
cash  at  their  command, 
they  are  greatly  handi- 
capped in  handling  their 
affairs. 


COLLEGE  BANK    tn  Acc'i  With 


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122.  On  this  page 

will  be  found  both  the 
Pass  Book  and  Deposit 
Ledger  '  'written  up  ' ' 
to  date.  Notice  that  the 
dedii  of  one  agrees  with 
the  credit  of  the  other. 

123.  To  Reconcile 

these    accounts    at    any 

time  is  to  show  that  the  J^U^J^^a^..^  - 
sum  of   all  outstanding^ 
checks  equals  the  differ- 
ence of   the  balances  of 
the  two  books. 


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TO  CASH 


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40 


BUSINESS    PRACTICE    BOOKKEEPING 


The  Balance  Sheet 


/^,'/j 


124.  In  Double  Hntry 

when  the  proprietor  or  firm 
wishes  to  know  the  exact  con- 
dition of  the  business,  z.  Bal- 
ance Sheet  is  necessary. 

125.  A  Balance  Sheet 

contains  the  following: 

1.  A  Trial  Balance  \ 
which  consists  of  the  debit 
and  credit  footings  of  the 
L,edger  accounts. 

2.  Loss  and  Gain  col- 
umns to  which  are  extended 
the  loss  or  gain  of  all  accounts 
showing  a  loss  or  gain. 

3.  Resource  and  Lia- 
bility columns  showing  the  net 
resource  or  liability  of  each  in- 
dividual account. 

4.  A  Summary  show- 
ing the  total  loss,  total  gain, 
total  resources,  and  total  liabil- 
ities, together  with  the  Net 
Gain  and  Present  Worth. 

126.  The    Accounts 

which  usually  show  a  Loss  or  a 
Gain  are  the  following:  Mer^ 
chandise,  Expense,  Furniture 
and  Fixtures,  Chattels,  Real 
Estate,  Stocks  and  Dividends, 
Interest  and  Discount ,  Collection 
and  Exchange,  Premium,  and 
Discount,  Commission  and 
Brokerage,  Insurance  and  Guar- 
anty, Storage,  etc. 

127.  After  the  Trial  Balance  is  complete,  enter  in  red  ink  all  inventories — the  Resource 
Inventories  in  the  resource  column  and  the  Liability  Inventories  in  the  liability  column,  each  on 
the  line  of  its  account. 

128.  All  Resource  Inventories  must  be  added  to  the  Credit  and  all  Liability  Inven- 
tories must  be  added  to  the  Debit  of  their  accounts  before  the  balance  is  taken. 

129.  Extend  all  balances  of  accounts  showing  a  loss  or  gain  to  the  Loss  and  Gain  columns, 
and  all  other  balances  except  the  Proprietor's  to  the  Resource  and  Liability  columns. 

130.  A  Debit  Balance  always  gives  a  loss  or  a  resource,  and  a  Credit  Balance  gives 
a  gain  or  a  liability. 

131.  The  l/OSS  and  Gain  columns  should  now  be  footed  and  their  difference  taken,  which 
is  a  Net  Loss  or  a  Net  Gain.  This  should  be  placed  under  the  less  footing  in  red  ink  and  ruled, 
the  totals  being  written  in  black  ink.     See  Model. 

132.  The  Proprietor's  JVet  Credit  or  Net  Investment  is  now  brought  down  and  to  it 
is  added  the  Net  Gain,  or  from  it  is  subtracted  the  Net  Loss  which  will  give  his  Presefit  Worth. 

133.  The  Present  Worth  added  to  the  Liability  footing  should  equal  the  footing  of  the 
Resource  Column,  thereby  proving  the  accuracy  of  the  work. 


BUSINESS  PRACTICE  BOOKEEPING 
FORM    OP    BAI<ANC:e    SHi^ET 


41 


r 


134.  The  following  is  the  method  of  completing  the  Summary  to  the  Balance  Sheet  when 
partners  are  represented  in  the  business: 

135.  A.  B.  Stvdent  furnishes  $3000  of  the  capital  invested  and  C.  D.  Sitident  inxmsh^s 
$2000;  therefore  the  former  is  entitled  to  three-fifths  and  the  latter  to  two-fifths  of  the  firm's 
N^t  Gain.     Each  partner's  ^am  added  to  his  Net  Investment  gives  his  Present  Worth. 


42  BUSINESS  PRACTICE    BOOKKEEPING 

Closing  the  lycdger 

136.  There  are  four  classes  of  accounts  to  close  in  the  Ledger. 

1.  Personal  Accounts,  those  accounts  with  the  people  with  whom  we  deal. 

2.  Accounts  Showing  a  J^oss  or  a  Gain. 

3.  The  l/oss  and  Gain  Account. 

4.  The  Proprietor's  or  Partners'  Accounts. 

137.  Personal  Accounts  are  closed  by  writing  the  difference  or  balance  of  the  footings, 
if  any,  upon  the  less  side  in  red  ink,  then  rule  and  write  the  total  footings  as  in  models.  The 
Balance  is  brought  down  in  black  ink  upon  the  opposite  side  and  below  the  double  line  ruling. 
See  pp.  37  and  38. 

138.  Accounts  showing  a  Loss  or  a  Gaiyi  are  closed  in  like  manner  with  two  exceptions: 
First — All  Inveyitories  must  be  entered  before  the  Balance  is  taken. 

Second — The  Balances  are  carried  to  the  Loss  and  Gain  Account  instead  of  being 
brought  down  as  in  Personal  Accounts.  Inventories,  only,  are  brought  down.  See  Mdse. 
Acct.  p.  34. 

139.  To  the  l,OSS  and  Gain  Account  are, carried  all  the  losses  and  gains  from  the  other 
accounts.  The  Balance  shows  the  Net  Loss,  or  the  Net  Gai7i,  which  is  carried  to  the  Proprietor' s 
Account.     See  p.  34.  • 

140.  To  the  Proprietor's  Account  is  forwarded  the  Net  Loss  or  the  Net  Gain  from  the 
Loss  ajid  Gai7i  Account.  The  gain  added  to,  or  the  loss  subtracted  from  the  Net  Investment  will 
give  the  Proprietor's  Present  Worth.     See  p.  34. 

WH^N    TO    CI/OS^    TH^    I^^DGISR 

141.  In  actual  business,  the  L,edger  Accounts  are  seldom  all  closed. 

142.  Personal  Accounts  are  usually  closed  at  the  time  of  settlement  only. 

143.  The  Cash  Account  is  closed  at  pleasure  of  the  bookkeeper.  Accounts  that  show 
a  Loss  or  Gai7t  are  closed  whenever  a  Balance  Sheet  is  rendered. 

Note — Should  any  accounts  become  very  long  or  it  become  necessary  to  forward  them  to  another  page 
it  is  usually  more  convenient  to  balance  them. 

144. — Outline  for  Closing  the  Ledger: 

I.  Close  Merchandise  Account: 

1.  By  entering  Inventory  on  credit  side  in  red  ink. 

2.  By  entering  lyoss  and  Gain  in  red  ink  on  less  side. 

3.  By  ruling  and  bringing  down  Inventory  on  debit  side. 

4.  By  carrying  the  Loss  or  Gain  to  the  Loss  and  Gain  account. 

II.  Close  all  other  accounts  that  show  a  Loss  or  Gain  in  a  similar  manner. 

III.  Close  the  Loss  and  Gain  Account,  carrying  the  Net  Loss  or  the  Net  Gain  to  the 
Proprietor's  Account. 

IV.  Close  the  Proprietor's  Account  and  bring  down  his  Present  Worth  on  the  credit 
side  or  his  Net  Insolvency  on  the  debit  side  of  his  account. 

Balance  of  Balances 

145.  After  closing  the  Ledger,  a  Trial  Balance  of  the  Balances  brought  down  should  be 
taken  before  going  on  with  the  next  Set. 


SET    II, 

Actual  Business  Practice 

146.  Its  Purpose:  The  purpose  of  this  Set  is  to  teach  the  Student  to  apply  the  funda- 
mental principles  of  dedil  and  credit  as  embodied  in  Double  Entry  Bookkeeping.  The  principal 
features  are  the  same  as  in  Part  First,  Set  I. 

147.  Actual  Business  Practice  transactions  are  the  basis  of  each  and  every  entry. 
Since  bookkeeping  is  a  record  oi  business  transactions,  the  Student  will  actually  perform  the  work 
•  as  directed  before  making  the  entries  in  his  book. 

148.  The  Guides  give  the  routine  of  work  to  be  performed  and  should  be  followed  ex- 
actly, and  to  the  minutest  detail.  Place  a  check  (i/)  mark  in  the  circle  at  the  left  after  the 
work  is  completed  and  the  entry  made. 

149.  Refer  frequently  to  the  forms  and  entries  as  suggested  in  the  Guides,  so  as  to 
master  as  soon  as  possible  these  necessary  details  of  correct  bookkeeping. 

150.  Books   Used:     The  principal  books  used  are   the  Journal  and  I^edger.     The 

auxiliary  books  are  the  regular  bank  books  of  account  and  the  Balance  Book. 

151.  About  Bills:  All  bills  of  Mdse.  must  contain  not  less  than  three  different  kinds 
of  goods,  unless  otherwise  directed  in  the  guides  or  the  purchase  be  by  telegram  or  telephone 
when  so  stated  in  the  guides. 

152.  About  Time:  In  your  school  work  "j(9  ^^."- equals  3  days  of  actual  time;  "60 
ds.''  equals  6  days  of  actual  time;  "90  ds."  equals  9  days.,  etc.  This  method  will  be  used  not 
only  in  timing  bills  and  invoices,  but  also  in  computing  interest  on  all  commercial  paper.  Thus: 
A  note  for  ''60  ds."  is  due  in  6  days  of  actual  time,  but  the  interest  is  reckoned  for  the  time  in- 
dicated in  the  note,   "60  days." 


44  BUSINESS   PRACTICE  BOOKKEEPING 

GUIDB    NO.   2,     SBT    II. -Produce  Business 

To  the  Student 

Note — Follow  this  Guide  to  the  letter.     Any  deviation  will  necessitate  a  repetition  of  the  entire  Set. 

153.     You  are  about  to  engage  in  the  Produce  Business  and  the  first  thing  necessary  is 
-O  obtain  funds  for  your  Investment. 

O  1.     Capital.     From    your  teacher  receive  instructions  for  obtaining  a  loan  of  $3000 

from  the  bank.  You  will  give  your  note  at  six  per  cent,  interest  for  ninety  days  for  the 
amount.  Your  teacher  will  sign  as  surety  with  you.  Take  this  note  to  the  Bank  and  receive 
your  money.     Make  entry  in  Journal.     See  Model  Entry  No.  1.  p.  19. 

Note — This  money  is  a  personal  loan  to  you  on  your  prvvaie  note  and  is  not  entered  in  the  books  of 
the  business. 

O  2.     Place  of  Business.     Your  next  step  is  to  secure  a  place  in  which  to  carry  on  your 

business.  Go  to  your  teacher  or  to  the  Real  Estate  Office  and  rent  a  store  for  which  you  will 
have  to  pay  a  monthly  rental  of  $100.  Pay  one  month's  rent  in  advance  and  get  a  receipt. 
Make  entry  in  Journal.     See  Model  No.  2. 

O  3.     Stationery.  You  will  now  need  blank  books,  blank  forms,  etc.,  for  office  use.  You 

will,  therefore,  purchase  of  your  teacher  a  complete  outfit  for  the  Produce  Business.  Pay  $10 
for  the  Outfit  and  get  a  receipted  bill  for  the  same.     Make  entry  in  Journal.     See  Model  No.  3. 

O  4.     Buy  for  Cash,  one  Office  Safe,  $70;  one  Office  Desk  and  Chair,  $20,  from  the  Com- 

mercial Exchange.     Pay  for  same  in  currency  and  get  receipted  bill.    See  Model  Entry  No.  4. 

O  5.     Bank  Deposit.     You  will  now  deposit  in  the  bank  all  your  cash,  $2800.     Make 

out  Deposit  Slip  and  open  an  account  with  the  Bank  in  your  Deposit  Ledger,  entering  "Cur- 
rency $2800"  in  the  deposit  column.  Take  your  deposit  slip  and  currency  to  the  Receiving 
Teller,  who  will  give  you  a  Pass  Book  and  a  Check  Book.  You  will  also  write  your  official 
signature  in  the  Bank's  Signature  Book.  Now  make  the  proper  entry  in  your  Journal.  See 
Model  No.  5. 

O  6.     Ordering  Goods.     You  are  now  ready  to  order  an  invoice  of  merchandise;  you 

will  therefore  fill  out  Order  Sheet  No.  1  with  the  following  and  hand  to  the  Commercial 
Exchange:     100  bbls.  R.   M.  Flour;   50  bbls.  Rolled  Oats;  75  bbls.  Corn  Meal;  900  doz.  Eggs 

—firsts;  30  doz.  Poultry.     See  Model  Order  Sheet,  p.  13. 

Ascertain  the  amount  of  the  bill  which  should  be  $1121.25;  return  to  your  desk  and  draw  a 
check  in  favor  of  the  Commercial  Exchange  for  that  sum;  take  it  to  your  teacher  and  get  his  O. 
K.  stamp  upon  it. 

You  will  next  receive  your  goods,  giving  your  check  for  them.  Examine  the  bill  carefully 
to  see  that  no  error  has  been  made,  also  count  your  Mdse.  and  check  the  same  on  the  bill.  Make 
entry  in  Journal.     See  Model  No.  6,  p.  19. 

O  7.     Pay  for  advertisement  in  daily  paper  by  Check  No. 2,  $12.50.     Make  entry.     Model 

No.  7. 

O  8.     Sell  for  cash  to  your  teacher:     20  bbls.  Flour,    10  bbls.  Rolled  Oats,  and  15  bbls. 

Corn  Meal.     For  prices  see  Market  Quotations  card.     Render  receipted  bill  for  same.     See 
p.  15.     Make  entry.     Model  No.  8. 

O  9.     Explain  to  your  teacher  why  Cash  is  debited  and  Mdse.  credited  in  the  above  sale. 

O  10.  Sell  to  some  student  a  bill  of  Mdse.  (3  cards)  for  Cash.  Render  receipted  bill  and 
make  entry. 

O  11.  Order  of  Commercial  Exchange  the  following:  1500#  Dairy  Butter;  3000#  Eastern 
Cheese;  3700#  California  Hops;  100  ctls.  Onions;  200  ctls.  Burbank  Potatoes;  on  account  30 
ds.,  to  be  shipped  by  freight  via  B.  C.  Ry.  When  the  Mdse.  arrives,  pay  freight  charges,  re- 
ceive goods,  and  make  proper  entry.    See  Model  No.  24. 


BUSINESS    PR  A  Cr ICE    BOOKKEEPING  45 

O  12.  Sell  to  some  student  a  bill  of  Mdse.  C4  cards)  on  account,  30  ds.    See  Model  No  11. 

O  13.  Buy  of  some  student  a  bill  of  Mdse.  (3  cards)  on  account,  30  ds.    See  Model  No.  12. 

O  14.  Biiyoi  some  student  a  bill  of  Mdse,  (5  cards)  for  cash.     See  Model  No.  13. 

O  15.  Sell  some  student  a  bill  of  Mdse.  (6  cards)  on  account,   60  ds.     See  Model  No,  14. 

O  16,  Sell  some  student  a  bill  of  Mdse,  (8  cards)  for  cash.     Model  No,  9, 

O  17.  Buy  of  some  student  a  bill  of  Mdse.  (about  $500  worth)  for  cash. 

O  18.  Buy  of  some  student  a  bill  of  Mdse.  (about  $300  worth)  on  account,  60  ds, 

O  19,  Pay  Commercial  Exchange  cash  on  account  by  check,  $824.50,     See  Model  No,  18. 

O         20.     Pay  student  for  invoice  bo't  in  Item  No,  13,  by  check.     Model  19. 

O  21.  Sell  Com'l  Exchange  for  cash  about  $500  worth  of  Mdse.  If  your  invoice  re- 
ceives the  teacher's  O.  K.,  the  manager  of  Com'l  Exchange  will  add  1  %  to  the  face  of  your 
bill  if  he  also  finds  it  correct.     See  Model  No.  20. 

O         22.     Receive  of  some  student  who  owes  you,  $200  on  account.     See  Model  No.  21. 

O         23,     Pay  some  student  cash  on  account,  $150,     Model  22, 

O         24.     Sell  Com'l  Exchange  a  large  bill,  about  $1000  worth,  on  account,  60  ds, 

O  25,  Order  of  wholesaler  on  account,  60  ds.,  as  follows:  30  cases  Eggs;  30  doz.  Poultry; 
1500#  Butter;  60  best  Eastern  Cheese;  20  bales  California  Hops, 

O  26.  You  will  now  proceed  to  post  as  directed  in  Set  I.  Check  every  item  in  both  Journal 
and  Ledger. 

O  27.  Next  take  a  Trial  Balance,     See  Model,  p,  25. 

O  28,  Prove  cash. 

O  29,  Rule  both  Cash  Account  in  the  Main  Ledger  and  also  in  the  Deposit  Ledger. 

O  30,  Get  your  books  O.  K'd. 


46 


BUSINESS    PRACTICE    BOOKKEEPING 


Notes  and  Drafts 


No. 

When  Received 

Maker  of  a  Note 
Drawer  of  a  Draft 

Endorser  of  Note 
Drawer  of  a  Draft 

in  Favor  of 

Interest 

Payable  at 

, 



None 

I 

Jan. 

4- 

D.  E.  Ford 

4.  B.  Chapman 

No  Int. 

ZNBank 

2 

<( 

25 

Edward  Sutton 

E.  W.Beatty 

A.  B.  Chapman 

6  % 

lur  Office 

7  1c 

3 

(< 

2 

W.  E.  Norris 

R.  E.  Leigh 

R.  E.  Leigh 

3. C.  Bank 

J  0.  Ford 

T.  E.  Shelford 

8  % 

4 

Feb. 

8 

Our  Office 

■ 

154.  In  the  Notes  Receivable  and  Notes  Payable  Book  is  kept  an  account  of  the 
Notes,  Drafts,  and  Due  Bills,  Receivable  and  Payable,  with  their  amounts,  dates,  when  due,  how 
disposed  of,  etc.,  recorded.  It  is  very  convenient  in  determining  when  to  expect  settlement  of 
such  paper. 

155.  To  Mnter  a  Note,  Draft,   or  Due  Bill  in  the  Notes  Receivable  and  Notes  Payable 

Notes  and  Drafts 


No. 

When  Given 

Maker  of  a  Note 
Drawer  of  a  Draft 

Endorser  of  Note 
Drawer  of  a  Draft 

In  Favor  of 

Interest 

Payable  at 

I 

Jan. 

5 

A.  B.  Chapman 

C.  IV.  Grove 

f.  S.  Sweet 

6  <fo 

ZN.Bank 

No  Int. 

2 

Jan. 

8 

A.  B.  Chapman 

F.  A.  Brush 

i<     <( 

3 

Feb. 

I 

A.  B.  Chapman 

NaVl  Bank 

7  1o 

S.F.  NaVl 

4 

Feb. 

7 

A.  B.  Chapman 

C  R.  Sweet 

E.   V.  Grant 

6  % 

> 

1 

BUSINESS    PRACTICE    BOOKKEEPING 


47 


Receivable 


DATE 

Time 

Year 

When  Due 

When  and  How  Disposed  of 

Year 

Month 

Day 

J 

F 

M 

A 

M 

J 

J 

A. 

3 

D 

sr 

D 

^9^3 

4- 

312 

12 

19^3 

Jan. 

4 

demand 

SO 

Jan 

Paid  in  Cash 

Jan. 

25 

' 

4 

- 

- 

500 

I913 

10  ds 

I913 

Jan 

30 

Paid  by  Check 

fan. 

2 

- 

... 

- 

- 

- 

420 

Mar 

3 

I913 

60  ds 

I9I3 

3 

Protested 

Feb. 

I 

go  ds 

I9I3 

-' 

-^ 

2 

- 

- 

- 

- 

670 

I913 



- 

- 

-- 

Book  is  to  write  its  number,  the  date  of  receiving  or  giving  the  note,  draft,  or  due  bill,  name  of 
maker,  name  of  endorser,  date,  time,  when  due,  etc.  each  in  its  correct  column. 

156.  When  a  Note,  Draft,  or  Due  Bill  is  paid  the  entry  fully  describing  the  manner  of 
payment  should  be  made  at  once. 

157.  This  is  merely  a  memorandum  book  and  the  items  are  not  posted  from  it  to  the  L^edger. 


Payable 


DATE 

Time 

Year 

When  Due 

Amount 

When  and  How  Disposed  of 

Year 

Month 

Day 

J 

F 

M 

A 

M 

J 

J 

A 

s 

0 

N 

D 

Jan. 

5 

6 

. 

I913 

60  ds 

^9^3 

7SO 

Mar 

9 

Paid  in  Cash 

Jan. 

8 

- 

Feb 

I 

No.  74. 

I913 

I  da 

I913 

9 

300 

Paid  by  Check 

2 

I9I3 

Feb. 

I 

go  ds 

I913 

450 

Renewed 

-y 

- 

- 

7 

876 

I913 

Feb. 

6  mos 

I9I3 

■ 

Commercial   Paper 


.     154.     Commercial  Paper  is  the  written  promise  or  request  to  pay  money. 

155.  There  are  two  classes  of  Commercial  Paper,  viz.: 

I.     Promises  to  Pay:  II.     Requests  to  Pay: 

1.  Promissory  Notes.  1.     Orders. 

2.  Bonds.  2.     Personal  Drafts. 

3.  Paper  Currency.  3.     Bank  Checks. 

4.  Acceptances.  4.     Bank  Drafts. 

5.,    Due  Bills.  5.     Bills  of  Exchange. 

6.     Letters  of  Credit. 

156.  A  Promissory  Note  is  the  written  promise  to  pay  a  certain  sum  of  money,  either 
-on  demand  or  at  a  specified  time. 

FORM  OF  PROMISSORY  NOTF 


tti^ilMHIliti* 


^'^===:>^2t''ff-r^<^''L/-..'-^^^^  ~ 


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'f^.^^^^^.^y^ 


j  ^$^^r      ^..^^4^f_ 


1-2^ 


1  !WWWflW!WBa^??!*?(«f^?*«ra«^eiejsjp»^^ 


**r*.1h'W.*»VIWtWPW\ 


157.  The  Pace  of  a  note  is  the  sum  written  in  the  note;  the  amount  promised  to  be  paid. 

158.  The  Maker  is  the  party  who  signs  it. 

159.  The  Payee  is  the  party  to  whom  or  to  whose  order  the  money  is  promised  to  be  paid. 

160.  The  Indorser  of  a  note  is  the  party  who  writes  his  name  on  the  back  of  it,  and  thus 
iDecomes  responsible  for  its  payment.  An  indorser  sometimes  writes  the  words  "  without  re- 
course," upon  the  back  of  the  note,  thereby  preventing  his  liability  to  be  sued. 

161.  A  note  should  contain  the  words  "  value  received,' '  though  not  legally  necessary. 

162.  An  AccoWLinodation  Note  is  one  given  without  a  consideration,  and  for  the  pur- 
pose of  obtaining  credit  for  another  person. 

163.  The  I/Cgal  Rate  of  the  state  is  allowed  on  interest  bearing  notes  when  no  rate  is 
mentioned. 

164.  A  Negotiable  ^Tote  is  one  containing  the  words  "lo  order,"  or  "lo  dearer."  It 
<;an  then  be  sold  or  "negotiated," 

165.  An  Indorsem.ent  in  Blank  is  merely  writing  the  name  on  the  back  of  the  note 
•or  draft. 

166.  An  Indorsement  in  Pull  includes  the  words,  *  'Pay  to  {the  payee's  name)  or  order, '  * 
^ith  date  and  signature  of  indorser. 


BUSINESS  PRACTICE  BOOKKEEPING 


49 


167.     The  words    "  Without   recourse"   in  an    indorsement    make  commercial    paper 
transferable  without  carrying  the  obligation  of  the  indorser  to  pay  as  guarantor. 


Y:=p7-«--t5t:i«»--2--t^^<*-?-»-t<*^^«-'^=-^^ 


f  '^:=:(>^'f'i^(!!,f-'i.^£^.'t-'>'C.r'-i-t'^^=.^^ 


/T^^.^^i.'Z^i^yc-C'^t^^^-eyl^^'-yt^^ 


168.  Paper  Currency  is  the  promissory  notes  of  the  government,  or  of  a  national  bank, 
to  pa\'  to  bearer  on  demand  the  sum  specified,  and  is  of  four  kinds,  viz.: 

1.  National  Treasury  Notes  (Greenbacks). 

2.  National  Bank  Notes. 

3.  Government  Silver  Certificates. 

4.  Government  Gold  Certificates. 

169.  A  Due  Bill  is  a  written  acknowledgment  of  a  debt.   It  is  usually  brief  and  informal. 
In  effect,  it  is  a  moral  promise  to  pay  and  is  treated  as  such  in  bookkeeping. 

FORM    OF    DUF     BIIvI, 


/^^^.-.^...-^.^^--t^^ 


/^   -y. 


c^/J-'t^C-^^^-tZ^LJd^ 


-  a-7-t^y^^^ 


O  Copy  the  above  on  ordinary  paper  and  hand  to  teacher  for  criticism.     After  corrections  are  made, 

copy  it  again  and  hand  your  best  work  in  for  inspection  and  record. 

170.  In  Bookkeeping  a  Due  Bill  is  treated  as  a  Note  Receivable  or  a  N'ote  Payable  and 
journalized  as  such. 

171.  Due  Bills  may  be  made  payable  in  any  specified  value;   as,  Cash,    Mdse.,    Labor, 
Produce,  etc. 


mnMM^^mwm^mmmmmmmwMm^m.wmmmmmmi 


ism 

m 


lass 


1^ 


UNITED  STATES  OP  AMERICA 

State  of  California 
City  and  County  of  San  Francisco 


$e®i 

l«0waa  Ololbg^  Eatlmag  dompang 

iFtrst  Mttxt^uQtBxx  pn  ttnt  linking  3nnh 

But  1932 

QltiP  ISufltttTHH  QlnUrgp  JRailmatr  Qlflmpang,  a  corporation  created  and  existhig  imder 
and  by  virtue  of  the  laws  of  the  State  of  California,  for  vahie  received,  promises  to 
pay  to  the  bearer  hereof,  or  in  case  of  registration,  to  the  registered  holder  hereof,  the 
sum  of  One  Thousand  ($1000)  Dollars,  Gold  Coin  of  the  Uiiited  States  of  America, 
on  the  first  day  of  October,  A.  D.  07ie  thousand  nine  hiaidred  and  thirty-two,  at  the 
office  of  the  UNION  TRUST  COMPANY  of  San  Fraiicisco,  in  the  City  a?id 
Coiuity  of  San  Francisco,  State  of  California,  together  with  interest  o?i  said  szim 
from  the  date  hereof  at  the  rate  of  six  per  cent  (6^0)  per  a?inum,  payable  half-yearly 
171  like  Gold  Coin  at  the  place  specified  in  the  annexed  coupons  on  the  first  days  of 
April  and  October  in  each  year,  upon  the  presentation  and  surre7ider  of  said  interest 
coupo7is  as  they  severally  becoine  due.  If  ayiy  installment  of  ijiterest  hereoji  shall 
remain  u?ipaidfor  a  period  of  six  months  after  the  same  shall  have  become  payable, 
then  the  principal  of  this  bond  may  be  declared  due  in  the  manner  and  with  the  effect 
provided  for  in  the  mortgage  or  deed  of  trust  hereinafter  mentioned. 

This  Bond  is  07ie  of  five  himdred  (joo)  bo7ids  of  the  U7idersig7ied,  all  of  like 
tenor  and  date,  nu7nbered  from  one  (i)  to  five  hundred  (500)  i7iclusive,  issued  and  to 
be  issued  to  an  amoiutt  not  to  exceed  Five  Hundred  Thousand  ($^00,000)  Dollars 
U7tder  the  p7'ovisio7is  of  and  to  be  equally  secured  by  a  mortgage  or  deed  of  trust 
dated  October  i,  igi2,  a7id  executed  by  the  said  B^isiness  College  Railway  Com- 
pany to  the  UNION  TRUST  COMPANY  of  San  Fra7icisco,  as  trustee. 

This  Bond  shall  not  be  obligatory  unless  authe7iticated  by  the  signature  of  said 
U7iio7i  Trust  Co77ipa7iy  of  San  Francisco,  Trustee,  to  the  Trustee's  Certificate 
endorsed  hereon. 

3ltt  HHitn^aa  Wk^tXtaf,  The  Business  College  Railway  Company  has  caused  these 
prese7its  to  be  signed  by  the  President,  a7id    its  corporate  seal  to  be  hereu7ito  af- 
fixed and  to  be  attested  by  its  Secretary,  a7id  coupons  for  said  i7iterest  with  the  e7i- 
graved  signature  of  its  Treasurer  to  be  attached  hereto,  this 
^N^^Ay^  fi^^^  d^y  of  October,  A.  D.  igi2. 

^  ^ustn^afi  Olnlh^f  Satlhia^  Olompaug, 


BY- 


PRESIDENT 


Attest: 


SECRETARY 


SB»{ 


m 


m 
m 


IP^MJ 


^^HMMMUMMr^^^ 


"^^'^^'^^'^:e::€K^::^::^:r'^ 


$30 


COUPON 


No.  3 


Thft  Business  College  Railway  Com- 
pany will  pay  the  bearer  at  the  office 
of  the  Union  Trust  Company  of  San 
Francisco,  Thirty  Dollars  in  U.  S. 
Gold  Coin,  being  six  months'  interest 
on  its  Gold  Bond  No. 

Apr.l, '  U-     A,  J.  Fuschia.,  Treas. 


$30 


COUPON 


No.  2 


The  Business  College  Railway  Com- 
pany will  pay  to  the  bearer  at  the  office 
of  the  Union  Trust  Company  of  San 
Francisco,  Thirty  Dollars  in  U.  S. 
Gold  Coin,  being  six  months'  interest 
on  its  Gold  Bond  No 

Oct.  1,' 13.     A.  T.  Fuschia.,  Treas, 


$30 


COUPON 


No.  I 


The  Business  College  Railway  Com- 
pany will  pay  the  bearer  at  the  office 
of  the  Union  Trust  Company  of  San 
Francisco,  Thirty  Dollars  in  U.  S. 
Gold  Coin,  being  six  months'  interest 

on  its  Gold  Bond  No. 

Apr.!,' 13.     A.  J,  Fuschia.,  Treas. 


The  above  is  an  abbreviated  form  of  Railway  Bond  with  three  sample  Interest  Coupons  attached. 


BUSINESS    PRACTICE    BOOKKEEPING 


51 


172.  A  Sond  is  the  promissory  note  of  a  government,  state,  or  corporation. 

173.  A  Coupon  Sond  is  one  having  Interest  Coupons  attached  which  may  be  clipped  off 
and  presented  for  payment  as  they  fall  due. 

174.  Bonds  are  of  many  kinds  and  conditions,    and   when  issued  by  capitalized  cor- 
porations are  usually  secured  by  mortgage. 

175.  An  Order  is  the  informal  written  request  of  one  person  upon  another  to  pay  a  cer- 
tain sum  of  money,  or  to  deliver  certain  designated  value  or  property  to  a  third  party. 

FORM    OF    ORD^R 


^/^#y 


/,  / 


■f/^ 


^^S^S'\^^ 


O  Copy  the  above  and  hand  to  teacher.     After  criticism  write  out  three  others,  payable  as  follows:  One 

payable  in  money;  one  payable  in  groceries;  and  one  payable  in  a  credit  of  $15  on  account.     File  these  for 
inspection  and  record. 

176.  A  Personal  Draft  is  a  forma/  written  order  upon  one  person  or  firm  to  pay  a  cer- 
tain sum  of  money  to  another  or  to  his  order  at  a  specified  time.  There  are  usually  three 
parties  to  a  draft;  the  Drawer,  the  Drawee,  and  the  Payee. 

Fortn  of  Personal  Draft  in  favor  of  a  Bank 


[y^^z^\  (^/^.^^^^.^^f^^^^^y 


177-     The  Drawer  is  the  party  who  signs  the  draft;  i.  e. ,   the  one  who  orders  the  pay- 
ment of  money. 

178.  The  Drawee  is  the  party  to  whom  the  order  is  addressed;  i.   e.,  the  one  who  is 
ordered  to  pay,  and  if  he  Accepts  it,  he  becomes  the  Acceptor. 

179.  The  Payee  is  the  one  to  whom  the  money  is  to  be  paid. 

180.  The  Drawer  and  Payee  may  be  the  same,  as  when  a  draft  is  sent  for  acceptance,  and 
to  be  returned  to  the  Drawer. 


52 


BUSINESS    PRACTICE    BOOKKEEPING 


181.  The  Acceptance  of  a  draft  is  the  agreement  by  the  Drawee  to  pay  the  same  at  ma- 
turity. This  is  done  by  writing  the  word  "Accepted"  with  date  and  signature  across  the  face  of 
the  draft.     See  model. 

An  "Acceptance,"    i.  e.,    an  Accepted  Draft 


182.  An  Acceptance  is  any  commercial  paper  across  the  face  of  which  has  been  written 
the  word  ^'Accepted'''  together  with  the  signature  of  the  payer.  It  then  has  all  the  essentials  of 
a  "promise  to  pay." 

183.  The  Acceptance  is  usually  written  in  red  ink  to  make  it  more  noticeable. 

184.  A  Si^ht  Draft  is  one  which  is  made  payable  at  sight  or  whenever  presented. 

185.  A  Xinie  Draft  is  one  which  is  made  payable  at  some  future  time,  and  is  usually 
written  a  certain  time  "after  date,"  or  "after  sight." 

186.  A  Bank  Check  is  the  written  order  of  a  depositor  upon  a  bank  for  the  payment  at 
sight  of  a  certain  sum  of  money  to  bearer  or  to  some  specified  person,  firm,  or  corporation.  See 
form  and  discussion,  p.  12. 

FORM    OF    BANK    DRAFT 


•fo|»iation(il  bank  ofCoininQrcc;. 

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187.     A  Dank  Draft  is  the  written  order  of  one  bank  on  another  bank  to  pay  a  certain 
sum  of  money  to  a  designated  payee  at  sight  or  at  some  specified  time. 


BUSINESS  PRACTICE  BOOKKEEPING  53 

188.  The  Drawer  is  the  bank  issuing  the  draft. 

189.  The  Drawee  is  the  bank  designated  to  pay  the  draft. 

190.  The  Payee  is  the  person  to  whom  the  money  is  to  be  paid. 

191.  Ba7ik  Drafts  are  always  treated  as  cash,  the  same  as  individual  checks. 

192.  Hills  of  Exchange  are  of  two  kinds:     Domestic  and  Foreign. 

193.  A  Domestic  Bill  of  Exchange  is  the  ordinary  Bajik  Draft  as  above  described. 

194.  A  Foreign  Bill  of  Exchange  is  the  order  of  a  bank  located  in  one  country  upon  a 
bank  in  another  country  to  pay  a  certain  sum  of  money  at  sight  or  at  a  specified  time. 

195.  Bills  of  Exchatige  facilitate  the  transfer  of  great  financial  values  between  distant  cities 
with  a  minimum  of  risk  and  expense.  Thus,  to  transfer  $1,000,000  in  gold  from  New  York  to 
Liverpool  would  mean  no  little  expense  in  cost  of  transportation,  insurance,  and  labor  involved. 
With  a  Bill  of  Exchayige  the  above  amount  can  be  transferred  with  but  very  little  expense  and  no 
risk. 

196.  The  following  will  illustrate  the  method  of  transferring  values  by  means  of  'Bills  oj 
Exchange: 

197.  D,  of  San  Francisco,  wishes  to  pay  E,  of  New  York,  $500, 

First — D  buys  a  draft  at  his  bank  in  S.  F.,  giving  therefor  $500  in  currency. 

Second — He  sends  it  by  mail  to  E  who  presents  it  at  a  N.  Y.  bank  and  receives 
his  cash. 

This  will  give  the  S.  F.  bank  $500  in  cash  that  belongs  to  the  N.  Y.  bank.  But 
bank  drafts  on  San  Francisco  are  daily  purchased  in  New  York  and  thus  the  values  are  kept 
surprisingly  well  balanced,  there  being  very  little  actual  transportation  of  money. 

I^etters  of  Credit 

198.  A  I/Ctter  of  Credit  is  a  bill  of  exchange  authorizing  certain  banks  to  pay  to  the 
holder  any  sum  not  exceeding  the  amount  specified. 

199.  Henry  Clews  &  Company  of  New  York  issue  Letters  of  Credit  and  mention  the  fol- 
lowing points  of  usefulness: 

1 .  They  are  drawn  on  the  leading  bankers  of  the  world  which  permits  the  encashment  of 
drafts  everywhere  and  on  fair  terms. 

2.  They  serve  as  an  introduction,  which  enables  the  holder  in  a  strange  land  to  obtain 
information  and  advice  from  the  most  reliable  and  important  sources. 

3.  They  act  as  a  passport,  providing  means  of  identification  among  strangers. 

4.  They  insure  to  travelers  the  safety  of   funds. 

5.  They  can  be  made  payable  to  an  individual  order;  or,  if  desired,  to  the  order  of  two 
or  more  persons,  which  is  oftentimes  desirable  where  the  members  of  a  family  are  traveling 
together. 

6.  They  permit  the  holder,  in  the  simplest  manner  possible,  to  draw  from  any  of  the 
thousand  or  more  bankers  named  in  our  list  such  sums  as  required,  in  the  money  of  the  realm, 
in  short,  under  our  guarantee  their  checks  are  cashed  in  all  parts  of  the  world  as  readily  as  at 
home. 

7.  They  enable  travelers  to  have  their  letters  and  telegrams  sent  to  them  ii  care  of  a  re- 
liable banker,  who  will  forward  them  to  any  new  address  required. 

8.  They  are  issued  against  a  deposit  of  cash,  collateral  security,  or  bank  guarantee. 

200.  No  person  should  travel  abroad  unless  provided  with  a  letter  of  credit. 


54 


BUSINESS  PRACTICE  BOOKKEEPING 


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SET    III. 


Actual  Business  Practice 

201.  Its  Purpose:  The  Purpose  of  Set  III.  is  to  give  further  practice  upon  the  forms 
and  principles  of  Journalizing  and  introduces  the  following: 

1.  Commercial  Paper. 

2.  Notes  Receivable  and  Notes  Payable  Accounts. 

3.  Notes  Receivable  and  Notes  Payable  Book. 

4.  Sales  for  Cash  and  Note. 

5.  Remittances  by  Bank  Draft. 

6.  Collection  and  Exchange  Account. 

7.  Inventories. 

8.  Balance  Sheet. 

9.  Closing  the  Ledger. 
10.  Balance  of  Balances. 

202.  Accuracy  is  absolutely  essential  to  proper  advancement.  Make  haste  slowly.  An 
error  once  made  will  take  much  valuable  time  to  correct.  Always  go  over  your  computations  in 
addition  and  other  arithmetical  operations  repeatedly  that  no  error  may  occur. 

203.  Study  the  Models  in  the  Initiatory  Set  that  you  may  become  familiar  with  the 
correct  forms  of  entries,  Bills,  Invoices,  Orders,  and  commercial  paper  of  all  kinds. 

204.  Books  Used:  The  books  used  are  the  /ourna/,  Ledger,  balance  '^ook,  a7id  Notes 
Receivable,  and  Notes  Payable  Book,  together  with  the  regular  bank  books  of  account. 

205.  The  Notes  Receivable  and  Notes  Payable  Book  is  an  auxiliary  book  in  which  is  kept 
a  record  of  all  notes  and  acceptances  received  or  given  by  the  firm. 

206.  Size  of  Bills:  A  ''small  bilV  indicates  one  not  over  $300;  a  "biir'  one  not  over 
$500;  a  "large  biW''  one  not  over  $1000;  and  a  ''very  large  bilV  one  not  over  $2000  in  value. 

207.  Charges:     The  following  are  the  incidental  charges  in  this  and  the  following  Sets: 

Freight;  1  %  of  amount  of  bill. 
Express;  2  %  of  amount  of  bill. 
Collection;  V2  %  on  amount  collected. 
Exchange;  %  %  on  face  of  draft. 
Insurajice;  1  %  premium  on  face  of  policy. 

208.  This  Set  is  a  continuation  of  the  business  of  Set  II.,  and  all  Ledger  Accounts  con- 
tinue as  in  the  previous  set. 


56  BUSINESS  PRACTICE  BOOKKEEPING 

GUIDB    NO.    3,    SBT    III.    Produce  Business 

Note — Follow  this  Guide  to  the  letter.  In  this  Set  do  not  buy  nor  sell  merely  to  accommodate  your 
neighbor.  Any  deviation  will  necessitate  a  repetition  of  the  entire  Set.  Be  sure  to  make  proper  entry  at 
close  of  each  transaction. 

O  1.     Go  to  the  freight  oiSce  and  receive  the  goods  ordered  in  No.  25  of  Set  II.     Pay 

freight  charges  by  check. 
O  2.     JJnspect  your  goods  and  check  up  the  bill.     See  that  no  errors  have  been  made,  then 

make  proper  entry  in  Journal. 

O  3.     Draw  Cash,  $20  from  bank,  by  check,  for  office  use.     Memorandum  only. 

O  4.     Pay  rent  of  P.  O.  box$1.00;  Postage  Stamps,  25}Z^;  Envelopes,  25^;   total  $1.50,   in 

currency. 
O  5.     Suy  of  Com'l  Exchange  a  Horse,  Harness,  and  Wagon  for  delivery  purposes.     Pay 

for  same  by  check. 
O  6.     JBuy  of  ^some  student  a  small  bill  of  Mdse.,  about  $300  worth,  on  account    3  ds. 

Check  up  the  bill. 
O  7.     Sell  some  student  a  bill  of  Mdse.,  four  kinds,  for  cash. 

O  8.     Pay  Com'l  Exchange  for  printing  bill  in  currency.     Get  receipted  bill. 

O  9.     Huy  of  some  student  a  bill  of  Mdse.  on  account,  30  ds.     Be  sure  to  check  it  up. 

O         10.     Sell  some  student  on  account,  30  ds.  a  bill  of  four  items,  value  about  $400. 
O         11-     -Buy  two  tons  of  coal  for  office  use.     Pay  for  same  in  currency. 

O         12.     Sell  some  student  a  bill  of  Mdse.,  about  $500  worth,  for  his  note  due  in  60  days 
without  interest.      (Notes  Rec.  Dr.  to  Mdse.  Cr.     Enter  in  Notes  Receivable  Book.) 

O         13.     JBuy  of  a  student  a  bill  of  Mdse.  for  cash. 

O         14.     Order  of  Com'l  Exchange  the  following:   100  bbls.  best  Roller  Mills  Flour;  50  bbls. 
Rolled  Oats;  75  bbls.  Corn  Meal;  100  ctls.  Onions;  200  ctls.  Burbank  Potatoes. 

O         15.     Remit  Com'l  Exchange  by  Chicago  Draft  $1000  on  account,  paying  exchange  $2.50. 
Note — Draw  vour  check  for  $1002  50  in  favor  of  your   bank.     The  cashier  will  make  out  the   draft  for 
you.     (Com'l  Ex.  Dr.  |1000.     Coll.  and  Ex.  Dr.  to  $2.50.      Cash  Cr.  |1002.50.) 

O         16.      Collect  of  some  student  who  owes  you,  $400  on  account. 

O         17.     Sell  Com'l  Exchange  a  large  bill  of  Mdse.  for  Cash.     Get  your  teacher  to  O.  K.  it. 
Note — If  your  bills  are  correct,    you  will  receive  one  per  cent,  additional  when  you  sell  to  the  Com'l 
Exchange. 

O         18.     Send  your  wholesale   merchant  your   note  for  $1000,  with  interest  at  6  %  for  60 
days.     Notes  Pay.  Cr.     Enter  in  Notes  Payable  Book. 

Collect  of  some  student  cash  to  balance  his  account. 

Buy  of  some  student  a  small  bill  of  Mdse.  on  account. 

Receive  goods  ordered  of  Com'l  Exchange  and  pay  freight  charges  on  same  by  check. 

Receive  Check  of  some  student  on  account. 

Sell  some  student  a  bill  of  Mdse.  for  cash  and  note  at  60  days,  with  interest  at  6%. 
N^te-  Rec.  Book. 
O         2+.     Sell  Com'l  Exchange  on  acct.  60  ds.   all  the  Mdse.  bought  of  students  not  whole- 
salers.    Be  sure  yoUr  bill  is  absolutely  correct. 

Note — One  per  cent,  will  be  deducted  for  every  error  in  bills  sold  to  Com'l  Exchange. 

O         25.     Havmg  completed  all  of  the  foregoing  work,  you  may  now  proceed  to  post.     Be  sure 
to  check  every  item. 

Prove  Cash,  and  take  a  Trial  Balance. 
Make  out  a  complete  Inve7itory  as  in  Set  I. 
Make  out  a  Balance  Sheet. 
Close  the  Ledger. 

Clean  your  books  of  all  blots,  scratches,  pencil  marks,  and  soiled  places  and  present 
them  to  your  teacher  for  criticism  and  record. 


o 

19. 

o 

20. 

o 

21. 

o 

22. 

o 

23. 

O 

26. 

O 

27. 

O 

28. 

O 

29. 

o 

30. 

BUSINESS  PRACTICE  BOOKKEEPING 


57 


How   to  Make  the  Opening  Entry 

A  Journal  Sntry  of  the  Resources  and  Liabilities  of  a  business  should  be  made  when  be- 
ginning or  resuming  business  after  a  Balance  Sheet  has  been  rendered.  The  following  is  a  simple 
form  which  will  answer  for  a  model  to  guide  the  student  in  making  his  opening  entries  in  the 
following  sets. 


FORM  OF  OPENING  JOURNAI^  FNTRY 


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58 


BUSINESS    PRACTICE    BOOKKEEPING 


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THB     CASH    BOOK 

209.  The  Cash  Book  is  a  book  of  origiyial  entry.     In  it  are  recorded  all  ^a^^  receipts  and 
all  ^a^^  payments.     It  is  G?^^  Account  of  the  lyedger  transferred  to  a  book  for  cash  entries  only. 

210.  On  the  Debit  or  /<?//  side  are  entered  all  <:a^^  receipts  together  with  the  date,  title  and 
explanation  of  each  item. 

211.  On  the  Creditor  right  side  are  entered  all  cash  pay^nents  together  with  the  date,  title 
and  explanation  of  each  item. 

212.  In  the  Title  Column  on  the  dedit  side  are  written  the  Ledger  Titles  of  the  Persons, 
Property,  or  Allowances  to  be  credited  by  the  entry. 

213.  In  the  Title  Column  on  the  credit  side  are  written  the  Ledger  Titles  of  the  Per 
sons,  Property,  or  Allowances  to  be  debited  by  the  entry. 

214.  In  the   'Explanation  Columns  sufl5cient  memoranda  should  be  written  to  give  a 
•clear  idea  of  the  nature  of  each  entry. 


BUSINESS    PRACTICE  BOOKKEEPING 


59 


'^^=^?^d,-^^-±^c^€^-ez.^i.^^^ /^    /^  /yS. 


Cash  Payments 


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215.  T>ro  Money  Columns  on  each  page  are  given  in  this  form  of  Cash  Book. 

216.  In  the  Mdse.  or  /(^/  /ia«^  column  is  entered  all  Mdse.  sold  (debit  side)  or  bought 
(credit  side)  for  cash.  Such  sales  or  purchase  Hems  are  noi  posted,  the  footings  only  being  posted 
to  the  Mdse.  account  in  the  Ledger. 

217.  In  the  General  or  rig-/it  hand  column  on  each  page  are  entered  all  other  cash  receipts 
and  payments  together  with  the  footings  of  the  Mdse.  columns. 

218.  Post  from  the  debit  side  of  a  Cash  Book  to  the  credit  side  of  the  Ledger;  and  from 
the  credit  side  of  the  Cash  Book  to  the  debit  side  of  the  Ledger. 

219.  Credit  in  the  Ledger,  the  Person,  Property,  or  Allowance  entered  on  the  /eft  or 
debit  side  of  the  Cash  Book  with  the  item  of  cash  received. 

220.  Debit  in  the  Ledger,  the  Person,  Property  or  Allowance  entered  on  the  rig/it  or 
credit  side  of  the  Cash  Book  with  the  item  of  cash  received. 

221.  Post  the  footings  of  the  Mdse.   columns  in  like  manner  to  the  Mdse.   Account  in  the 

Ledger. 


60  BUSINESS    PRACTICE    BOOKKEEPING 

222.  JP'orward  the  footings  of  the  Mdse.  columns  to  the  General  column,  balance  the  ac- 
count as  shown  in  the  model,  rule,  and  bring  down  Balance, 

223.  Check  each  item  as  posted.     This  is  done  by  placing  the  Ledger  page  in  the  check 
column  of  the  Cash  Book,  and  the  Cash  Book  page  in  the  check  column  of  the  L,edger. 

224.  Page   the  dedii  side  of  the  Cash  Book   in  even  numbers,  and  the  credit  side  in  odd 
numbers.     This  will  assist  in  tracing  errors  by  check  numbers. 

225.  To  Balance  the  Cash  Book  is  to  write  the  difference  of  the  two  sides  on  the  less  side 
in  red  ink,  rule,  and  bring  down  the  difference  on  the  opposite  side. 

226.  The  Balance  if  a  resource  (cash  on  hand)  will  appear  on  the  debit  side,  in  black 
ink;  if  a  liability  (overdraft)  it  will  appear  on  the  credit  side. 

227.  To  Prove  the  Cash,  add  the  cash  on  hand  to  the  amount  in  bank  as  shown  by  the 
Deposit  Ledger;  the  sum  should  be  the  balance  as  shown  by  the  Cash  Book. 

228.  If  an  Overdraft  should  occur,  add  the  cash  on  hand  to  the  Cash  Book  balance  and 
the  sum  should  equal  the  balance  of  the  Deposit  Ledger. 

229.  The  Balance  of  the  Cash  Book  should  always  show  the  cash  on  hand,  both  in  safe 
and  in  bank. 

230.  The  Cash  on  Hand  is  always  the  differeyice  between  the  Balances  shown  by  the  De- 
posit Ledger  and  Cash  Book. 


Cash  Book  Practice 

231.  The  following  Memoranda  are  given  to  illustrate  the  manner  of  making  entries  in 
the  Cash  Book. 

232.  Each  transaction  should  be  carefully  noted,  and  the  corresponding  Model  Entry 
copied  in  every  detail. 

233.  Observe  the  heading,  dating,  checking,  title,  explanation,  footings,    ruling,    and   bal- 
ancing.    In  fact,  master  this  book;  it  will  aid  you  in  all  your  future  work. 

234.  This  Cash  Book  is  made  up  of  model  entries ,  each  being  numbered   for  reference,  and 
each  one  illustrating  a  different  feature  in  cash  book  accounting. 

Note — The  numbers  at  the  left  refer  to  the  corresponding  entry  in  the  Model  Cash  Book.   The  student 
should  study  the  memoranda  and  the  entries  together. 

February  1,  1913. 
O  1-     A.  B.  Chapman,    proprietor,    invests   or  has  a  balance  of  $4000  cash  on  hand  with 

which  to  begin  or  resume  business. 

Paid  Feb.  rent  of  store  building  in  cash,  $150. 

Bo't  Office  Safe  for  cash,  $120. 

Sublet  second  floor  of  store  building,  and  received  one  month's  rent  in  cash,  $50. 

Bo't  of  Com'l  Exchange  1200  ctls.  Wheat  @  $1.10  per  ctl. 

Sold  Geo.  McNear,  Petaluma,  160  ctls.  Wheat  @  $1.25. 

Rec'd  of  E.  V.  Grant,  cash  on  account,  $145.20. 

February  3,  1913. 
Bo't  stationery  and  postage  stamps  for  cash,  $17.45. 
Bo't  for  cash,  Mdse.  per  Invoice  #22,  $400. 
Sold  for  cash,  Mdse.  per  Sales  Inv.  #44,  $143.60. 
D.  M.  Bryant  paid  his  note  and  interest  in  full.     Face  of  note,  $500;  Int.,  $37.50. 


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3. 

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4. 

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5. 

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8. 

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9. 

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10. 

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11. 

BUSINESS  PRACTICE  BOOKKEEPING  61 

O         12.     Paid  our  note  in  favor  of  C.  R.  Sweet  with   interest  in  cash.     Face  of  note,   $100; 

Int.  $34.70. 
O         13.     Bo't  of  J.  K.  Gill,  Portland,  Mdse.  per  Inv,  ^22>.  $700.  Gave  in  payment  our  check 

for  $300,  and  our  note  at  60  ds.  for  balance. 

Note — Mdse.  is  debited  and  Notes  Payable  credited  in  the  Journal  for  $400. 
O         14.     Sold  C.  A.  Wright  &  Co.  Mdse.  per  Sales   Invoice    #45,   $440.     Rec'd  cash,  $200; 

their  note  at  30  ds.  with  int.  for  balance. 

Note — Notes  Receivable  is  debited  and  Mdse.  is  credited  in  the  Journal  for  |240. 
O         15.     Paid  ly.  S.  Goodyear  for  Inv.  #14,  bo't  Jan.  5,  by  check,  $155. 
O         16.     A.  J.  Fuschia  paid  cash  in  full  for  Sales  Inv.  #36,  $250. 

February  4,  1913. 
O         17.     Bo't  of  Emporium  Mdse.  per  Inv.    #25,  $650.     Paid  for  same  with  draft  on  E.  V. 
Grant  for  $200,  and  the  balance,  $450,  by  check. 

Note — Mdse.  is  debited  and  Grant  credited  for  |200  in  Journal. 

O         18-     Sold  A.  J.  Fuschia  Mdse.   per  Sales  Invoice  #47,  $650.     Rec'd  in  payment  a  draft 

at  10  ds.  sight  on  Emporium  for  $250,  and  the  balance  in  cash,  $400.     Presented  the  draft  to 

the  Emporium,  and  the  same  was  accepted. 

Note — Notes  Receivable  is  debited  and  Mdse.  credited  in  the  Journal  for  $250. 
O         19.     Paid  M.  N.  I^ong  for  Inv.  #21,  $122.50,  less  discount,  $12.25. 
O         20.     I.  J.  King  paid  for  Sales  Inv.  #41,  $74.50,  bo't  Jan.  31,  less  discount,  $7.45. 
O         21.     R.   B.    Hall  prepaid  his   note  less  discount  in  cash.     Face  of  note,  $240;  discount, 

$3.20. 
O         22.     Prepaid  our  note  #17  in  favor  of  E.   V.    Grant  less  discount.     Face  of  note,  $600; 

discount  allowed,  $18.40. 

February  5,  1913. 
O         23.     Remitted  Com' 1  Exchange  by  bank  draft  on  New  York,  $1000.     Paid  exchange  on 

same,  $2.50. 
O         24.     A.  B.  Chapman  withdraws  cash,  $20,  for  private  use. 
O         25.     Paid  clerk's  salary  in  currency,  $21. 

O         26.     The  cash  sales  taken  from  the  Cash  Register  total  $215.40. 
O         27.     Total  the  Mdse.  columns  and  forward  the  amounts  on  the  same  line  to  the  General 

columns.     Foot,  balance,  and  rule  the  account.     The  Bala^ice  is  the  sum  of  cash  in  the  safe 

and  in  the  book. 

O         28.     Present  your  work  to  your  teacher  for  criticism  and  record. 


62 


BUSINESS  PRACTICE  BOOKKEEPING 


Statement  When  Selling  Out 

235.  The  following  is  the  form  of  statement  to  render  to  the  buyer  of  the  business  when 
the  proprietor  sells  out.  It  will  be  noted  that  it  differs  from  the  opening  statement,  the  balance 
being  equal  to  the  sum  of  Chapman's  Present  Worth  and  the  Notes  Payable. 


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Journal  Bntry  in  Selling  Out  the  Business 

236.  The  Journal  Mntry  upon  selling  out  is  similar  to  any  other  Journal  entry  in  that 
it  credits  all  properties  or  values  delivered  and  debits  all  liabilities  cancelled  by  the  transaction. 
The  Bala?ice  is  first  charged  to  the  buyer,  and  upon  receipt  of  his  check,  Cash  is  debited  and  then 
buyer  credited  with  the  amount  which  should  balance  his  account. 


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SET    IV. 

Actual  Business   Practice 

237.  Its  Purpose:  The  purpose  of  this  Set  is  to  give  the  student  exercises  in  the  princi- 
ples of  bookkeeping  already  presented,  and  to  acquaint  him  with  another  book  of  original  etitry : 
the  Cash  Book. 

238.  Books  Used:     The  principal  books  used  in  this  Set  are  the  Journal,  Cash  Sook, 

and  LfCdger,  together  with  the  Auxiliary  Bank  Books  and  Notes  Receivable  and  Notes  Payable 
Book. 

239.  Principaiv  Features: 

1.  How  to  open  a  set  of  books  when  a  formal  statement  of  the  Resoiirces  and  Lia- 
bilities is  necessar}'^. 

2.  Introduction  of  Cash  Book. 

3.  Title  and  Explanation  Columns,  and  paging  of  Cash  Book. 

4.  Making  out  and  executing  a  lease. 

5.  Treatment  of  interest  bearing  notes. 

6.  Interest  and  Discount  accounts. 

7.  Posting  from  Cash  Book  and  checking. 

8.  Proving  Cash  Book  with  Deposit  Ledger. 

9.  Reconcilement  of  Deposit  lycdger  and  Pass  Book. 

10.     Selling  out  the  business.  ' 

240.  Opening  Journai,  Entry:  On  page  57  will  be  found  a  model  of  An  Opening  Entry 
at  the  beginning  of  Set  IV.  The  Student  should  note  \h&form  carefully  and  copy  the  Resources 
and  Liabilities  from  his  own  Balance  Sheet  at  the  close  of  Set  III. 

Note — These  accounts  being  already  in  the  Ledger  are  not  posted,  but  are  checked  with  the  Ledger 
page. 

241.  Notes:  When  promissory  notes,  acceptances ,  or  due  bills  are  given  or  received,  the 
face  is  always  used  to  represent  the  Note  Payable  or  the  Note  Receivable.  If  Interest  or  Discount 
is  considered,  it  becomes  a  separate  item  under  the  title  "interest  and  Discount,'''  and  does  not 
affect  the  other  accounts. 

242.  Dates:     Be  sure  to  date  each  item  with  the  actual  date  of  the  transaction. 

Note — In  your  work,  a  bill  sold  on  30  ds.  is  due  in  3  days  of  actual  time,  and  one  sold  on  60  ps.  is  due 
in  6  days  of  actual  time.  This  method  is  used  to  facilitate  your  school  work  and  would  not  apply  to  actual 
business. 

243.  Abbreviations  and  Capitai^s:     Always  write  short  words  in  full. 

1.  Abbreviations  of  the  terms  expressing  quantity  should  begin  with  a  small 
letter;  as,  bu.,  lbs.,  oz.,  brls.,  bbls.,  cts.,  doz.,  ctls.,  etc. 

2.  The  names  of  items  bought  or  sold,  when  written  in  a  bill.  Journal,  or  Sales 
Book,  should  begin  with  a  capital;  as,  100  brls.  Flour;  200  ctls.  Ttirkey  Red  Wheat;  5  tons 
Alfalfa  Hay. 

3.  The  abbreviation  for  Commercial  Exchange  is  Com' I Exchayige;  never  Com.  Ex. 

4.  All  the  months  except  May,  June,  and  July  may  be  abbreviated. 

5.  The  following  are  permissible:  Bo't,  P'd,  Rec'd,  Ans.,  Coll.  and  Ex.,  Int. 
and  Dis.,  Com.  and  Brok.,  Fr't  and  Guar.,  Pres.  Worth,  Inv.,  Shpt.  and  Con. 


•  64  BC/S/NBSS  PRACTICE  BOOKKEEPING 

GUID:^    no.     4.     SET    IV.     Produce,  Hay,   and  Grain 

O  1-     Read  again   pages  58-60  and  63,  that  you  may  have  a   comprehensive   idea   of  the 

work  and  purposes  of  this  Set. 

O  2.     Open  your  books  with  a  formal  statement  of  your  Resources  and  lyiabilities  as  shown 

at  the  close  of  Set  III.,  and  check  every  item.    (See  form  p.  62.) 

O  3-     You  will  now  take  out  a  two  week's  lease  of  your  place  of  business,  paying  $150  rent 

for  same.     Write  out  lease  and  both  yourself  and  teacher  will  sign  it.     See  Model   Lease  in 
Appendix. 

O  4.     Order  by  letter  a  large  bill  of  five  cards  each  of  Beans,    Barley,    Corn,   Alfalfa  Hay, 

and  Oat  Hay  from  the  leading  wholesaler.     Terms  asked,  30  ds.     Get  your  letter  O.  K'd. 

O  5.     Sell  to  Com'l  Exchange  one-third  your  old  stock  of  Produce  for  cash.     C.  B.  10. 

O  6.     ^uy  of  some  student  a  small  bill  of  Mdse.  for  cash.     C.  B.  9. 

O  7.     Sell  for  cash  to  some  student  3  cards  of  one  article  of  Produce.     C.  B.  6. 

O  8.     Insure  your  Mdse.  for  $2000,  at  a  premium  of  1  %.     C.  B.2. 

O      -9.     Buy  a  small  bill  of  Mdse.  from  some  student  for  cash. 

O         10.     Sell  a  small  bill  of  Mdse.  to  some  student  for  cash. 

O         11-     Buy  a  bill  of  Mdse.,  4  cards,  on  account  30  ds. 

O         12.     Sell  a  bill  of  Mdse.,  4  cards,  on  account  30  ds. 

O         13.     Pay  electric  light  bill  for  January  in  cash,  $7.50. 

O         14.     Buy  of  wholesaler  a  bill  of  Md.se.     Give  check  for  one-half,  and  your  note  at  30  ds. 
with  interest  at  6  %  for  balance. 

O         15.     Sell  to  Com'l  Exchange  a  large  bill  of  goods  bo't  of  floor  students.     Receive  one- 
half  cash,  and  note  for  30  ds.  with  interest  at  6  %  for  balance. 

O         16.     Pay  some  student  whom  you  owe  $200  on  account. 

O         17.     Collect  of  some  student  who  owes  you  $200  on  account. 

O         18.     Pay  cash  for  one  of  your  outstanding  notes  and  interest  on  the  same. 

O         19.      Collect  on  one  of  the  notes  held  by  you,  both  for  face  of  note  and  interest. 

O         20.     Deposit  your  checks  in  bank  as  soon  as  you  have  /ive  on  hand.     Never  hold  many 
checks  on  hand.     You  are  liable  to  loss  by  delays. 

O         21.     Collect  any  bills  that  may  be  due. 

O         22.     Pay  all  bills  now  due  in  cash. 

O         23.      Give  some  student  whom  you  owe  your  note  at  60  ds.  with  interest  at  6  %. 

O         24.     Receive  of  some  student  who  owes  you  his  note  at  60  ds.  with  interest  at  6  %. 

O         25.     Pay  your  teacher  $5.00  for  advice. 

O         26.     Prove  Cash  and  take  a  trial  balance.    Copy  it  in  your  Balance  Book  and  get  O.  K. 

O         27.     Sell  a  bill  of  Mdse.  on  acct.  90  ds. 

O         28.     Buy  a  bill  of  Mdse.  on  acct.  90  ds. 

O         29.     Sell  Mdse.  bo't  of  floor  students  to  Com'l  Exchange  for  cash.     Is  your  work  cor- 
rect?    Did  you  get  your  1  %  advance  for  perfect  work? 

O         30.     Buy  of  wholesaler  a  large  bill  of  Mdse.  on  acct.  60  ds. 

O         31.     Remit  wholesaler  by  N.  Y.  Draft  $1000.     Pay  Exchange  $2.50. 

O         32.     Buy  Mdse.  of  some  student  on  his  terms. 

O         33.     >Sei/ five  cards  of  grain  for  note  on  demand  without  interest. 

O         34.     Sell  three  cards,  different  kinds,  for  cash. 

O         35.     Buy  for  note  on  demand.     No  interest. 

O         36.     Buy  Mdse.  for  cash. 

O         37.     Return  three  cards  of  Mdse.  to  wholesaler  as  ''not  up   to  sample.'''     Receive  Mem. 
of  Credit. 

O         38.     Sell  Mdse.  for  one-half  cash,  balance  on  acct.  60  ds. 

O         39.     Buy  Mdse.,  one-half  cash,  balance  on  acct.  60  ds. 

O         40.     Sell  to  Com'l  Exchange  on  acct.,    Mdse.  bo't  of  floor  students,    not   over  $2000 
worth.  » 


o 

41. 

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42. 

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43. 

lection. 

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44. 

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45. 

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46. 

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47. 

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48. 

correctly 

o 

49. 

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50. 

BUSINESS    PRACTICE    BOOKKEEPING  65 

Collect  on  acct.  all  bills  due. 

Pay  all  outstanding  accounts  and  notes  due. 

Sell  at  the  bank  all  notes  at  60  ds.  or  over  held  by  you.     Give  discount  and  col- 

Collect  all  notes  given  for  30  ds.  or  less,  which  are  on  hand  and  due. 

Make  Out  Inventory  complete.     See  p.  33. 

Xake  Trial  Balance  and  prove  and  rule  Cash. 

Make  Out  Balance  Sheet  and  copy  it  in  your  Balance  Book. 

Close  all  accounts  that  show  a  loss  or  a  gain.     Be    careful  to  rule  your  accounts 

Balance  all  accounts  that  occupy  five  lines  or  over. 

Cleayi  yo2ir  Books  of  all  blots,  lead  pencil  marks,  and  soiled  places,  and   present  them 
for  inspection  and  record. 

SBI/I/ING    OUT 

244.  You  wiLi^  NOW  SEiyiy  to  your  teacher  your  entire  business,  as  shown  by  your  balance 
sheet,  except  your  Notes  Payable  outstanding,  these  will  remain  a  liability  in  your  next  opening 

entry. 

245.  To  accomplish  this  successfully  you  will  carefully  follow  the  outline  below. 

O  1-      Make  out  a  complete  Stateme?it  of  your  Resources  and  Liabilities,  except  Notes  Paya- 

ble, similar  to  the  one  on  page  62. 

O  2.     Prove  the  accuracy  of  this  Statement  by  showing  that   the  balance  of  the  same  is 

equal  to  the  sum  of  your  Present  Worth  and  Notes  Payable. 

O  3.     You  will  now  proceed  to  deliver  all  Property,  Notes  Receivable,  and  Accounts  as  noted 

on  your  '"  Statement"  which  your  teacher  will  check  off  as  he  receives  them. 

Note— Give  a  certified  check  for  the  amount  of  cash  in  bank,  and  render  an  inventory  of  all  property 
to  be  delivered,  including  Notes  Receivable,  Mdse.,  Chattels,  etc.  Notify  all  parties  with  whom  you  have  an 
account  of  the  sale  of  same,  and  verify  each  one  before  presenting  statement  to  teacher. 

O  4.     Having  completed  the  sale  you  will  now  make   proper  entry  in  the  Journal.     Debit 

the  Liabilities  and  credit  the  Resources  each  with  its  item  of  account  and  Debit  the  purchaser 

with  the  difference  between  the  Resources  and  lyiabilities. 
O  5.     Post  'Cix^cash  to  the  Cash  Book  and  all  other  accounts  to  the  I^edger.  Check  every  item. 

O  6.     Foot  and  Rule  all  accounts  that  exactly  balance. 

O  "•     Present  your  statement  together  with  your  books  to  your  teacher  for^^  examination. 

O  8.     If  everything  is  accurate,  you  should  have  but  three  open  accounts:  The  Proprietor' s 

Account^  Notes  Payable  Account,  and  Purchaser'' s  Account.       These    being    correct,  the   teacher 

will  give  you  a  check  covering  his  account. 

Note — Hold  this  check  until  you  receive  directions  for  disposing  of  the  same. 
O  9.     Enter  this  also  in  your  Journal,  posting  it  to  the  credit  of  the  buyer's  account  and  to 

the  debit  of  Cash  in  the  Cash  Book  as  "  Cash  on  Hand."'     See  p.  62. 

O         10.     After  reviewing  your  work  carefully,   present  your  books  for  final  inspection  and 
record. 


66 


BUSINESS    PRACTICE    BOOKKEEPING 

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246.  The  Sales  Hook  is  another  book  of  original  entry  and  has  a  great  variety  of  forms 
in  common  use. 

247.  The  Standard  JE^orm  here  illustrated  has  columns  for  Sale  hivoice  No.^  Ledger 
folio,  title,  date  and  items,  price,  extensions,  and  terms  of  sale;  whether  for  cash,  note,  or  on 
account. 


BUSINESS  PRACTICE  BOOKKEEPING  67 

248.  Cash  Registers  are  now  in  almost  universal  use  and  many  of  them  not  only  re- 
cord all  cash  sales,  but  also  record  all  cash  receipts  and  disbursements  with  a  complete  record  of 
every  transaction. 

249.  An  Invoice  Sales  Book  consists  of  a  book  of  Invoices  with  blank  back  sheets  upon 
which  duplicate  bills  are  made  by  using  carbon  paper.  Copies  of  the  original  bills  are  thus  pre- 
served for  posting  and  for  future  reference. 

250.  In  the  Sa/es  Book  should  be  recorded  every  sale  fully  itemized,  priced,  extended,  and 
total  placed  in  its  proper  column. 

251.  In  the  Standard  Eorni  one  total  column  is  for  Cash  Sales  2A\d  one  for  sales  on  Personal 
or  Notes  Receivable  accounts. 

252.  Post  from  the  Sales  Book  by  debiting  the  Person  or  Notes  Receivable  with  the 
amounts  sold  on  accojint  or  for  notes  or  accepta)ices  received,  and  by  debiting  Cash  for  the  footing 
of  the  cash  sales  column.  Credit  the  Merchandise  Account  with  the  footings  of  both  total  sales' 
columns. 

253.  Page  the  Sales  'Book  by  using  odd  nnmbers  owXy .  This  will  cause  all  checkings  from 
this  book  to  the  Ledger  to  be  in  odd  numbers,  quite  an  assistance  in  tracing  errors. 

254.  Check  each  sale  in  both  Sales  Book  and  Ledger,  using  page  numbers  or  Sale  Invoice 
numbers.     The  Sale  Invoice  number  is  preferable. 

255.  The  Student  will  carefully  note  the  different  terms  of  sale  in  the  model  entries  and 
follow  them  to  the  letter.  A  perfect  mastery  of  this  book  will  assist  greatly  in  all  future  forms 
and  uses  of  this  important  book. 

256.  The  following  memoranda  is  to  be  copied  in  perfect  form  in  the  students'  practice 
Sales  Book.     After  making  entries  complete  the  columns  should  be  tooted  and  ruled. 


Sales  Book  Practice 

O         1.     March  1.     Sold  R.  L.  Goodyear  on  account,  30  ds.:     50  brls.  Flour  @  $5;    200  ctls. 

Wheat  @  $1.60;  100  ctls.  Oats  @  $1.75. 
O         2.     March  1.     Sold  W.  Stewart,  on  acct.,  30  ds.,,2  %  10  ds.:     1000#  Rolled  Oats  @  4^; 

1800#  Corn  Meal  @  2V2f,  6  cases  Eggs,  180  doz.,  @  22^. 
O         3.     March  2.     Sold  Jones  &  Company  for  their  check  on  the  College  National  Bank:    200 

ctls.  Barley   @  $1.50;    20  ctls.  Navy  Beans  @  $4;   80  ctls.  Missouri  Valley  Corn  @  $1.70;  15 

tons  Alfalfa  Hay  @  $15. 
O         4.     March  2.     Sold  Benj.   F.  Hall  for  his  note  at  30  ds.  with  interest  at  6  %:     10  ctls. 

Burbank  Peas  @  $4.90;  30  tons  Choice  Oat  Hay  @  $12;  150  ctls.  Turkey  Red  Wheat  @  $1.75. 
O         5.     March  3.     SoldL.  C.  McCann:   12  doz.  Poultry  @  $5;    300#  Dairy  Butter  @   37y2j^. 

Received  cash,  $100;  balance  on  account  30  ds. 
O         6.     March  4.     Sold  Jones   &    Company:    600#    Cheese    @    17^;    740#    California   Hops 

@  33 Va^;  360  doz.  Eggs  @  25j^.     Received  cash,  $200;   their  60  da.  note  with  interest  at  7  % 

for  balance. 


68 


BUSINESS    PRACTICE    BOOKKEEPING 

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257.  The  Invoice  Book  or  Purchase  Book  is  a  book  of  original  entry  in  which  are  placed 
in  numerical  order  the  i>ivoices  of  Mdse.  bought  by  the  firm. 

258.  The  Sills  or  Invoices  may  be  fastened  in  a  binder  or  may  be  pasted  in  a  blank 
book  with  one  or  more  money  columns  at  the  right  for  the  extension  of  the  amount  of  each  bill 
or  invoice. 

259.  These  Invoice  Books,  Invoice  Binders,  Invoice  Files,  etc.,  as  they  are  called,  are  of  many 
varieties,  but  all  have  the  same  object  in  view.,  the  sj-stematic  filing  of  all  bills  and  invoices  for 
record. 


BUSINESS    PRACTICE    BOOKKEEPING  69 

260.  The  Standard  Form  illustrated  here  will  serve  to  fully  illustrate  its  use  and  will 
give  the  student  an  accurate  knowledge  of  the  general  use  of  all  such  books  or  devices. 

261.  Page  the  Invoice  Book  by  using  even  numbers  only.  This  will  cause  all  checkings 
from  this  book  to  the  I,edger  to  be  in  even  numbers,  quite  an  assistance  in  tracing  errors. 

262.  Two  Money  Columns  are  here  illustrated,  the  first  or  left  column  is  for  cask  pur- 
chases, and  the  other  for  purchases  on  account  or  for  Notes  Payable  . 

263.  Number  the  Invoices  consecutively  and  be  sure  to  c/ieck  o^  the  Mdse.  received 
before  placing  the  bill  in  the  Invoice  Book. 

264.  Post  to  the  fl?;?^^// of  iT/(^^^.  the  total  footings  of  both  "cas/i"  and  "accozcnt"  columns 
of  the  Invoice  Book.  Credit  Cash  with  the  footing  of  the  ''cash"'  column,  Notes  Payable  for  the 
face  of  the  notes  given,  and  each  Seller  with  the  amount  of  Mdse.  bought  of  him  on  account. 

Note — If  a  draft  on  a  third  party  is  given  for  Mdse.,  credit  said  third  party  for  the  face  of  the  draft. 

265.  When  no  Cash  Column  is  kept  in  the  Invoice  Book,  all  '' spot  cash''  purchases  are 
entered  directly  in  the  Cash  Book.     See  Cash  Book,  p.  59. 

266.  Check  by  entering  the  lycdger  page  in  the  check  column  of  the  Invoice  Book  and 
the  page  of  the  Invoice  Book  in  the  check  column  of  the  Ledger.  Thus  checkings  from  this  book 
will  give  even  check  numbers  in  the  credit  of  personal  accounts  and  in  the  debit  of  Mdse.  account 
in  the  Ledger. 

Invoice  Book  Practice 

O         1-     March  4.     Bo't  of  Samuel  Frank  &  Sons,   Chicago,  for  cash,   Mdse.  per  Invoice  No. 

51,  $224.75. 
O         2.     Bo't  of  Elevator  Milling  Company,  City,  on  acct.  30  ds.,    Mdse.  per  Invoice  No.  52, 

$87.60. 
O         3.     Bo't  of   the  Jones  Grocer  Company,  St.   Louis,   for  our  note  at  60  days  with  interest 

at  6  %,  Mdse.  per  Invoice  No.  53,  $429.50. 
O  '+•     Bo't  of  Warley  Fruit  &  Produce  Co.,  Memphis,  Tenn.,  Mdse.   per  Invoice  No.  54, 

$176.40.     Paid  them  $100  cash,  balance  on  acct.  30  ds. 
O  5.     Bo't  of  Sam  V.  Goodman,  Lebanon,  Ky.,  Mdse.    per  Invoice  No.    55,   $540.     Gave 

him  cash  $200  and  our  ninety  day  note  with  interest  at  7  %  for  the  balance,  $340. 
O  6.     Bo't  of  Alexander  Grocery   Company,   San  Francisco,   Mdse.  per  Invoice  No.   56, 

$532.50.     Gave  in  payment  our  check  for  $200,  a  draft  on  B.  F.  Hall  for  $250,  and  the  balance 

on  account  30  ds. 


70  BUSINESS    PRACTICE    BOOKKEEPING 

QUESTIONS 

1.  What  is  Bookkee^:)ing ?     Name  the  two  principal  systems. 

2.  What  is  Double  Entry  Bookkeeping  ?     Single  Entry  ? 

3.  What  is  a  Principal  Book  ?     An  Auxiliary  Book  ? 

4.  What  is  meant   by  Cash  ?     Merchandise?     Real  Estate?     Chattels?     Furniture  and  Fix- 
tures ?  Bills  Receivable  ?     Bills  Payable  ?     Expense  ? 

5.  What  is  meant  by  Resources ?     Liabilities? 

6.  What  is  Interest ?     Discount? 

7.  What  is  meant  by  Debit ?     Credit? 

8.  Explain  how  to  foot  an  account.     How  to  balance  an  account. 

9.  What  constitutes  the:  Joianial  of  bookkeeping? 

10.  Describe  the  Blotter,  or  Day  Book  entry.     The  Journal  entr^-  proper. 

1 1 .  What  is  Journalizing  ?     How  many  debits  or  credits  may  a  Journal  entry  have  ? 

12.  Give  the  Principle  of  debits  and  credits. 

13.  Name  the  three  general  classes  of  accounts. 

14.  What  is  meant  by  Persons?     By  Propertj^  ?     By  Allowances  ? 

15.  Give  the  principles  of  Journalizing.     Illustrate  each. 

16.  Describe  the  Deposit  Ledger. 

17.  How  is  a  Deposit  Ledger  balanced? 

18.  What  is  a  Check  ?     Describe  the  Check  Book. 

19.  How  is  a  check  certified  ? 

20.  What  is  a  Pass  Book  ?     What  are  its  uses  ? 

21.  Describe  a  Deposit  Slip.     How  is  it  u.sed  ? 

22.  Describe  the  Ledger. 

23.  What  is  Posting  ?     When  should  accounts  be  posted  ? 

24.  Describe  the  manner  of  checking  accounts. 

25.  What  is  meant  by  (J.  F.  ). 

26.  What  is  a  Trial  Balance ?     How  footed? 

27.  Describe  the  Balance  Sheet  in  full. 

28.  Name  the  accounts  which  usuall}^  show  a  loss  or  a  gain. 

29.  What  is  done  with  inventories  before  balances  are  taken? 

30.  What  does  a  debit  balance  give  ?     A  credit  balance  ? 

3 1 .  How  is  the  net  loss  or  net  gain  found  ?     Present  Worth  ? 

32.  How  many  and  what  are  the  classes  of  accounts  in  the  ledger? 

33.  How  are  personal  accounts  clcsed  ? 

34.  How  are  accounts  that  show  a  loss  or  gain  closed? 

35.  How  is  the  Loss  and  Gain  Account  closed  ? 

36.  Describe  the  method  of  closing  the  Proprietor's  Account. 

37.  When  are  accounts  closed  in  the  ledger  ? 

38.  W^hat  is  meant  by  "  balance  of  balances"  ? 

39.  Give  ten  methods  of  locating  errors  when  the  trial  balance  will  not  balance. 


SET    V. 

Actual  Business  Practice 


267.  Its  Purpose:     The  purposes  of  this  set  are  presented  in  the  following  outline: 

1.  The  introduction  of  the  Sales  Book  and  the  Invoice  Book. 

2.  How  to  make  Sales  entries  for  Cas/i,  Note,  Draft,  and  on  account. 

3.  How  to  post  from  the  Sales  Book. 

4.  How  to  treat  purchases  for  cask,  note,  draft,  and  on  account. 

5.  How  to  post  from  the  Invoice  Book. 

6.  How  to  page  the  Sales  Book  and  the  Invoice  Book. 

7.  How  to  transfer  a  bank  account. 

8.  Treatment  of  drafts  and  acceptances. 

9.  Admission  of  parttier  and  articles  of  co-partnership. 

10.     General  illustration  of  how  to  close  a  full  double  entry  set  of  books  when  there  are 
partners. 

268.  Opening  Statement:  The  opening  statement  in  the  Journal  will  be  similar  to 
the  one  on  page  57,  but  much  more  simple;  there  being  only  a  Cash  resource,  a  Notes  Payable 
liability,  the  Present  Worth  of  each  partner,  and  Student's  private  account. 

269.  Review:  Read  again  the  discussions  on  the  preceding  pages  referring  to  the  Sales 
Book  and  the  Invoice  Book,  their  forms  and  uses. 

270.  Neatness:  Great  care  should  be  taken  in  regard  to  accuracy  and  neatness.  To  be 
a  good  bookkeeper  requires  both  these  elements  in  a  high  degree.  Ask  your  teacher  to  note 
your  improvement. 

271.  Taking  a  Partner:  When  beginning  this  set  the  student  will  take  in  a  partner 
who  will  have  a  one-half  interest  in  the  business.  He  will  have  to  draw  up  articles  of  co-part- 
nership which  must  be  signed  by  both  parties  to  the  transaction.  For  form  of  Articles  of  Co- 
partnership, see  Appendix. 

272.  Closing  the  I^edger:  At  the  close  of  this  set  the  student  will  be  required  to  make 
out  a  Balance  Sheet  giving  to  each  partner  his  share  of  the  profits  or  losses.  He  will  also  close 
the  Ledger  accounts  showing  a  loss  or  a  gain  to  the  Loss  and  Gain  Account,  and  then  close  the  I,oss 
and  Gain  Account,  forwarding  each  partner's  loss  or  gain  to  his  proprietary  account.  See  p.  41. 

273.  Hereafter  all  notes  and  acceptances  at  10  days'  time  or  over  received,  should  be 
sold  to  the  bank  the  following  day.  All  time  notes  and  acceptances  payable  in  less  than  10  days, 
should  be  left  at  the  bank  for  collection.  All  demand  notes  and  drafts  payable  at  sight  should  be 
collected  by  the  holder  within  3  days  of  receipt  thereof.  All  notes  should  bear  interest  at  not 
less  than  six  per  cent. 

274.  Keep  all  Mdse,  bought  of  wholesalers  separate  from  that  bought  of  students  on  the 
floor.  Sell  all  Mdse.  bought  of  wholesalers  to  floor  students,  and  that  bought  of  students  on  the 
floor  sell  to  the  Commercial  Exchange.     See  Mdse.  Envelopes. 


72  BUSINESS    PRACTICE    BOOKKEEPING 

GUIDB    NO.    5,     SBT    V.    Tea  and  Coffee  Business 

O  1-     Read  again  all  that  you  can  find  pertaining  to  the  Sales  Book  and  the  Invoice  Book  as 

they  are  the  main  books  to  be  exemplified  in  this  set.  Prepare  a  place  for  everything 
about  your  office.  Your  final  standing  in  this  set  will  be  largely  influenced  by  the  order  and 
system  shown  in  your  work.  Have  a  place  for  each  book,  blank  form,  and  article  used.  Keep 
both  inside  and  outside  of  your  desk  in  perfect  order. 

O  2.     Admit  Partner.     You  will  now  find  some  student  whom  you  will  take  into  part- 

nership with  you.  Each  partner  is  to  contribute  equal  amounts.  You  will  furnish  cash  suffi- 
cient to  cover  your  Notes  Payable  and  a  Net  Investment  of  $2000.  Your  partner  will  furnish 
$2000  cash.  The  firm  name  shall  be  Student  and  Company.  You  are  to  receive  $50  per  week 
for  conducting  the  business  and  the  losses  and  gains  are  to  be  shared  equally.  Draw  up  Arti- 
cles of  Co-partnership.     See  Model  in  Appendix. 

Note — In  making  the  above  entry  in  the  Journal,  debit  Cash  for  the  check  received  from  selling:  out 

and  for  the  $2000  furnished  by  partner.     Credit  Notes  Payable  for  its  item,  and  credit  each  partner  for  $2000  as 

his  Net  Itwesttnent;  also  credit  your  pri'ua.te  account  with  whatever  excess  may  remain. 

O  3.     Deposit  in  a  different  bank  from  the  one  you  formerly  patronized,  the  check  you  re- 

ceived on  selling  out  and  also  the  $2000  one  furnished  by  partner.  Receive  a  new  check  book 
and  draw  out  $200  in  currency  for  office  use. 

O  4.     Buy  blank  books,  stationery,   etc.,  paying  $10  in  currency  for  the  same.     Do  not 

pay  rent  until  so  directed. 

O  5.      Open  your  books  by  making  the  proper  Journal  entry,  and  by  entering  Cash  07i  hand 

in  the  Cash  Book.  Remember  that  ''Cash  oft  hand''  is  always  \he first  entry  in  the  Cash  Book. 
Post  Notes  Payable  and  both  the  Proprietors'  credits  including  your  Private  Account  to  the 
Ledger. 

O  6.      Order  a  new  stock  of  Tea  and  Coffee,  5  cards  of  each  kind,  on  30  ds.  time.     Write 

a  letter  to  the  wholesaler  and  enclose  Order  Sheet  properly  filled  out.  Have  same  O.  K'd. 
before  mailing.     Make  Journal  entry.     See  Model  24,  p.  21. 

O  7.     Advertisement.     While  waiting  for  your  goods  to  arrive,  write  out  a  display  ad- 

vertisement announcing  to  the  public  that  the  new  firm  will  keep  an  up-to-date  stock  of  high 
grade  teas,  coffees,  cocoa,  and  chocolate  and  solicit  a  share  of  their  patronage.  Present  same  to 
teacher  for  publication  and  pay  $12.50  for  same. 

O  8.     Receive  goods  ordered  in  No.  6  and  pay  freight,  1  %  of  the  cost,  by  check.     C.  B. 

O  9.      Check  otf  bill  and  enter  in  your  Invoice  Book  as  bo't  on  account. 

O  10.  Remit  wholesaler  $1000  by  N.  Y.  bank  draft,  paying  Vl  %  exchange.  See  note 
under  No.  15,  page  56. 

O         11-     Ruy  for  cash  small  office  desk  and  chair,  $20;  also  small  sized  safe,  $70. 

O  12.  Sell  a  di//oi  3  different  kinds  of  goods  to  some  student  for  cash.  S.  B.  Bny  on 
same  terms. 

-Buy  horse,  harness,  and  delivery  wagon  for  cash. 
Sell  one  card  each  of  five  different  kinds  of  Mdse.  on  account,  60  ds. 
Suy  on  same  terms. 

Order  of  wholesaler  by  letter  and  order  sheet  five  cards  each  of  ten  different  kinds 
of  Tea,  Coffee,  etc.  on  account,  90  ds. 

Sell  a  bill  of  two  cards  each  of  3  kinds  of  Mdse.  for  cash. 

Buy  on  same  terms. 

Sell  to  Com'l  Exchange  on  account,  60  ds.,  all  the  goods  bo't  of  floor  students  to 

Sell  4  cards,  2  kinds,  of  Coffee  for  cash.     Buy  on  same  terms. 


o 

13. 

o 

14. 

o 

15. 

o 

o 

16. 
f  Tea, 

o 

17.' 

o 

18. 

O         19. 
date. 

o 

20. 

BUSINESS  PRACTICE  BOOKKEEPING  73 

O         21.     Receive  goods  ordered  in  No.  16,  and  pay  freight  on  same. 

O         22.     Sell  six  cards  of  Mdse.  for  note  at  60  ds.  with  interest  at  7  % .    Biiy  on  same  terms. 

O  '2^-  Se// eight  cards,  4  kinds  of  Mdse.,  ^/2  cash  and  V2  note  at  90  ds.  with  interest  at 
6  % .     Buy  on  same  terms. 

O         24.     J?uy  Typewriter  and  Desk  of  Com'l  Exchange  on  acct.,  30  ds. 

O  25.  Sell  to  some  student  two  cards  each  of  Cocoa,  Chocolate,  and  Mocha  Coffee,  V2  cash, 
balance  on  acct.     Buy  on  same  terms. 

O         26.     Remit  wholesaler  by  bank  draft  for  balance  due  on  invoice  bought  in  No.  8. 

O         27.     Sell  all  Mdse.  bo't  of  floor  students,  to  Com'l  Exchange,  on  account,  90  ds. 

O         28.      Collect  all  bills  dice  for  goods  sold  on  acct. 

Note — Goods  sold  on  acct.  30  ds.  are  due  3  ds.  from  date  of  bill,  and  sales  on  60  ds.  are  due  6  ds.  from 
date  of  bill. 

O         29.     Pay  for  all  bills  due  bo't  on  acct. 

O  30.  Take  a  Xrial  Balance,  prove  and  balance  Cash,  and  reconcile  your  Deposit  Ledger 
with  your  Pass  Book. 

O  31.  Mdse.  Stock.  From  now  on  you  will  be  expected  to  order  Mdse.  from  the 
wholesalers  as  it  is  needed  without  further  instructions.  Always  keep  a  good  stock  of  Mdse. 
on  hand. 

O  32.  Sell  a  bill  of  six  cards  of  Coffee,  3  kinds,  to  some  student  on  acct.  60  ds.  />/n'  on 
same  terms. 

O         ^5-     Sell  a  bill  of  eight  cards  of  Tea,  4  kinds,   for  cash.     Buy  on  same  terms. 

O  34.  Sell  a  bill  of  Cocoa  and  Chocolate,  4  cards,  for  note  at  90  ds.  with  interest  at  6  %. 
Buy  on  same  terms. 

O  35.  Sell  Tea.,  Coffee,  and  Cocoa,  6  cards;  part  cash,  balance  acct.  60  ds.  Buy  on  same 
terms. 

O  36.  Sell  MdvSe.,  8  cards,  for  cash  and  note  at  4  mo.,  with  interest  at  6  %.  Buy  on 
same  terms, 

O         37.     Discount  the  above  note  at  bank  at  8  %. 

Note — To  find  Net  Proceeds.  Suppose  the  note  to  be  |300.  Interest  for  4  mo.  at  6  per  cent,  is  $6.  The 
discount  on  |306  for  4  mo.  at  8  per  cent  at  bank  is  $8.16.  |306  less  $8.16  equals  |297.84,  Net  Proceeds.  See 
item  21,  C.  B. 

O  38.  Remit  wholesaler  for  Invoice  bo't  in  No.  21.  He  will  give  you  1  %  discount  for 
cash  at  this  time.     See  item  19,  C.  B. 

O  39.  Collect  of  Com'l  Exchange  for  bill  sold  in  No.  27.  Give  1  %  discount  for  cash 
this  time.     See  item  20,  C.  B. 

Pay  cash  for  notes  due  outstanding  and  interest. 

Collect  on  notes  due  and  interest  to  date. 

Sell  Tea,  4  kinds,  on  acct.,  60  ds.     Buy  on  same  terms. 

Sell  Coffee,  4  kinds,  on  acct.,  60  ds.     Buy  on  same  terms. 

Sell  two  cards  each  Tea,  Coffee,  Cocoa,  and  Chocolate;  part  cash,  and  draft  on  Com'l 
Exchange  for  balance.     Buy  on  same  terms. 

O         45.     Sell  Mdse.  bo't  of  floor  students  to  Com'l  Exchange  on  account  60  ds. 

O         46.      Collect  all  accounts  due  in  cash  or  require  settlement  by  note  or  draft. 

O         47.     Pay  all  accounts  due  in  cash   or  by  note  or  draft. 

O         48.     Pay  yourself  $50  per  week  as  manager  and  bookkeeper  for  the  business, 

O  49.  Pay  your  teacher  $10  in  currency  for  assistance  rendered,  and  your  family  doctor 
bill  of  $50  in  currency.     Get  teacher's  O,  K,  on  this  item, 

O  50.  Take  Trial  Balance.  Prove  Cash.  Take  complete  inventory  including  a  liability  in- 
ventory of  unpaid  rent  $150.  Make  out  Balance  Sheet.  Close  Eedger.  Divide  the  profits 
equally.  Reconcile  your  bank  account,  clean  your  books  and  present  them  for  inspection  and 
record. 


0 

40. 

0 

41, 

0 

42, 

0 

43. 

0 

44. 

74 


BUSINESS    PRACTICE    BOOKKEEPING 


cACCOUm  SALES  SNP. 


CONSIGNMENT  €NiO. 


A.  B.  Chapman  &  Company 

COMMISSION    MERCHANTS 

Chicago,  IIL,     July   1,    1913 
Recdvedof         The   MERRITT   FRUIT   PACKING   COMPANY, 

Santa  Rosa,    California. 
To  be  sold  on  their  account  and  risk: 

400   "boxes  Early  Crawford  Peaohes 
100   crates   Strawberries 


July 

July 


July 
July 


2 


3 


200   bxs.    Peaches 

50   crates   Strawberries 

200  bxs.  Peaches 

50  crates  Strawberries 


bl.40 
6.-- 

1.25 

5.15 


Charges: 

Freight 

Cartage 

Commission,    10%  on  sales 

Net  Proceeds   remitted   in  cash 


81 
14 


25 
75 


c4CC0UNT   TU%CHASE 


PURCHASE  SNP. 


The  Merritt  Fruit  Packing  Company 

COMMISSION  MERCHANTS 

Santa  Rosa,  Cal.,  July   1,    1913; 
Bought  for  A.    B.    CHAPMAN  &  COMPANY, 

Chicago,    Illinois, 
The  following  goods  per  their  order  of  July   1 ,    1 9 1 3 


Purchases: 

50  Boxes  Navel  Oranges 
40     "      "      " 
35    "  Lemons 

Charges: 

Freight 
Cartage 
Commission,  3% 

Amount  charged 


)3.25 

2.75 
3.50 


21 
3 


25 
50 


Note— Compute  the  net  proceeds  in  the  Account  Sales,  total  costs  and  total  charges  in  the  Account  Purchase. 


SET    VI. 

Actual  Business   Practice 

275.  Its  Purpose:  Set  VI.  is  intended  as  a  general  review  of  all  previous  work  as  ex- 
emplified in  a  full  double  entry  set  of  accounting.  No  new  books  are  introduced  but  several  new 
features,  the  principal  of  which  are  as  follows: 

1.  Opening  of  the  books  of  a  partnership  business. 

2.  Buying  out  partner  without  taking  an  inventory  or  closing  the  books. 

3.  Selling  an  interest  in  the  business  without  taking  a  balance  sheet. 

4.  Purchase  and  sale  of  Real  Estate  including  the  execution  of  Deed  and  Mortgage. 

5.  Purchase  of  Stocks  and  sale  of  same. 

6.  Advanced  treatment  of  sight  and  time  drafts. 

7.  Telegrams,  Money  Orders,  Statements,  and  Collections. 

8.  Admission  of  additional  partners. 

9.  Receiving  consignments  and  making  shipments  "on  sale." 

10.     Closing  the  books  when  several  partners  are  interested  in  the  business. 

276.  A  Formal  Opening  Statement  will  be  necessary  at  the  beginning  of  this  set, 
consisting  of  all  the  Resources  and  lyiabilitiesr  of  the  firm  including  partnership  and  private 
accounts. 

277.  This  Set  is  the  climax  of  your  work  thus  far  and  should  represent  the  best  you  can 
do  in  neatness,  accuracy,  and  general  proficiency  in  bookkeeping..  Unless  the  work  of  this  set  is 
satisfactory,  you  will  have  to  review  one  or  more  sets  before  proceeding  further. 

278.  Keep  your  eyes  open  and  your  wits  keen.  Make  as  few  mistakes  as  possible.  A  mis- 
take will  delay  you  longer  than  it  will  take  to  do  the  work  ten  times  over.  The  secret  of  rapid 
progress  is  "work  well  done." 

279.  Write  a  letter  to  your  parents  informing  them  that  you  hav^e  completed  the  "interme- 
diate Work"  of  your  course  of  study,  and  enclose  a  record  of  your  standing  to  date. 


76  BUSINESS  PRACTICE  BOOKKEEPING 

GUIDB    NO.    6.    SBT    VI.     Groceries,  Tea  and  Coffee 

O  1-     Read  all  that  pertains  to  the  business  practice  of  this  set  given  on  p.  75.     This  is  the 

last  set  of  the  "  Intermediate  Work  "  and  should  represent  your  best  efforts, 

O  2.     Open  your  Books  with  a  complete  formal  statement  of  the  business  as  shown  at 

the  close  of  Set  V.     Get  your  teacher's  O.K.  before  proceeding  further. 

O  3-     Order  oi  wholesaler  a  stock  of  Groceries  (5  cards  each  of  10  kinds)  to  be  shipped 

by  freight  on  60  ds.  time.     Pay  freight  when  goods  arrive. 

O  4.     Put  your  desk  in  perfect  order  and  call  the  attention  of  your  teacher  to   the  same. 

Keep  it  so  at  all  times. 

O  5-     Buy  iov  yom:  private  property  the  real  estate  you  have  been  renting.     Give  $1000 

cash  (private  funds)  and  your  personal  note  for  $1000  for  6  months  at  6  %  interest  secured  by 
mortgage  for  same. 

Note — You  will  write  out  both  deed  and  mortgage  ready  for  signatures.     The  seller  will  sign  the  deed 

and  you  will  sign  the  mortgage.     Have  both  acknowledged  and  recorded.     See  forms  of  deed  and  mortgage 

in  Appendix.     Get  teacher's  O.  K. 

O  6.     Buy  10  shares  of  Bank  Stock.     Do  not  pay  a  premium  greater  than  the  income  of 

the  bank  would  justify. 

Note — You  are  expected  to  secure  enough  stock  in  the  different     corporations  so  that  you  will  be 
qualified  to  become  a  director  if  necessary. 

O  7.     Sell  to  some  student  Mdse.,  2  cards  each  of  3  kinds,  on  acct.  60  ds.     'Stcy  on  same 

Sell  to  another  student  Mdse.,  2  cards  each  of  3  kinds,  for  cash.  Buy  on  same  terms. 

Exchange  your  small  Office  Safe  for  a  larger  one  and  pay  the  difference  in  cash,  $175. 

Sell  the  Horse,  Harness,  and  Wagon  on  acct.,  30  ds.,  $200. 

Buy  Motor  Delivery  Car,  $900.     Give  cash  $500,  note  at  90  ds.,  at  7  %,  for  balance. 

Sell  2  cards  each,  Coffee,  Sugar,  Syrup,  and  Baking  powder;  V2  cash,  bal.  on  acct., 
60  ds.     B7iy  on  same  terms. 

O  13.  Sell  2  cards  each,  Soda,  Soap,  and  Baking  powder  for  cash  and  note.  'S^uy  on 
same  terms. 

O  ■       14.     Remit  wholesaler  for  some  invoice  bo't,  less  discount,  by  exchange  on  N.  Y. 

O  15.  Return  to  wholesaler  two  cards  Catsup  as  "not  up  to  sample."  Receive  his  Mem. 
of  Credit.     Debit  Wholesaler  and  credit  Mdse. 

O  16.  Sell  3  cards  each,  Molasses,  Worcestershire  sauce,  and  Washing  powder;  V2  cash, 
and  for  balance  at  30  ds.  draft  on  Com'l  Exchange.  Get  same  accepted  at  once.  ^7iy  on 
same  terms. 

O  17.  Sell  2  cards  each,  Tea,  Coffee,  and  Chocolate;  %  draft  at  sight,  balance  on  acct., 
30  ds. 

O  18.  >Sliip  3  cards  Tomato  catsup  to  some  commission  merchant  to  be  sold  ("On  Sale") 
on  your  account  and  risk.     See  Ship't  Invoice,  p.  74.     Receive  goods  "  On  Sale"  as  above. 

O         19.     Remit  by  P.  O.  Money  Order  $100  to  some  one  on  account. 

O     *  20.     Post,  take  a  Trial  'Balance,  prove  Cash.     No  Balance  Sheet. 

O  21.  Buy  out  your  partner.  Give  him  a  certified  check  for  the  amount  of  his  investment 
plus  5  %  of  the  net  sales  to  date.     Partner  and  I^oss  &  Gain  Dr.  to  cash.     C.  B.    Get  O.  K. 

O  22.  Secure  a  loan  at  the  bank  for  $2000,  giving  your  note  at  90  ds.  with  interest  at  6  % 
for  that  sum. 

O  23.  Sell  2  cards  each,  Sugar,  Molasses,  Soda,  and  Soap,  for  note  at  60  ds.,  with  interest 
at  7  % .     Buy  on  same  terms. 

O         24.     Sell  one  card  each  of  five  kinds  of  Mdse.,  30  ds.  on  acct.     Buy  on  same  terms. 

O         25.     Bay  cash  on  account.      Collect  cash  on  account. 

O  26.  W^atch  your  Notes  Payable  and  Notes  Receivable  and  pay  or  collect  both  principal 
and  interest  when  due. 


terms. 

0 

8. 

0 

9. 

0 

10. 

0 

11. 

0 

12. 

o 

34. 

o 

35. 

o 

36. 

o 

37. 

o 

38. 

o 

39. 

o 

40. 

BUSINESS  PRACTICE  BOOKKEEPING  77 

O         27.     Prepay  some  note  not  yet  due  and  ask  discount.     Collect  on  same  conditions. 

O  28.  Sell  to  Com'l  Exchange  a  large  dill  oi  Mdse.  bo't  of  floor  students  on  acct.  60  ds. 
Receive  of  Commercial  Exchange  one-half  of  the  amount  they  owe  you.  Allow  them  1  % 
dscount.     Render  them  a  Statement. 

O         29.     Post,  take  a  Trial  Balance,    and  prove  Cash. 

O  30.  Sell  a  one-third  interest  in  your  business  to  some  student  for  cash  without  taking  a 
Balance  Sheet.  The  firm  name  is  to  be  Student  &  Co,  You  are  to  receive  6  %  of  the  net 
sales  since  beginning  this  set  as  your  net  profits  to  date,  and  your  new  partner's  check  for  Vs 
your  Net  Investment.  You  are  to  receive  $100  per  week  for  managing  the  business  and  keep- 
ing the  books. 

Note — Draw  a  check  in  favor  of  yourself  for  6  per  cent,  of  sales  and  charge  to  Loss  and  Gain.     This 
check  and  the  one  received  from  your  partner  are  your  private  funds.     Eo  not  invest  them  in  the  business. 

O  31.  Draw  on  Com'l  Exchange  for  $500  in  favor  of  wholesaler  and  mail  to  him  at  once. 
Wholesaler  Dr.  to  Com'l  Exchange  Cr. 

O  32.  Accept  a  time  draft  drawn  on  you  by  wholesaler.  (Pay  sight  drafts  in  cash)  In- 
struct wholesaler  to  draw  same. 

O         33.     Sell  Mdse.  to  some  student  on  acct.,  60  ds.     ^uy  on  same  terms. 

Sell  Mdse.  for  cash  and  note  for  balance.     Bicj/  on  same  terms. 

Sell  Mdse.  for  $100  cash,  balance  for  sight  draft  on  Com'' I  Exchange.    Buy  ditto. 

Sell  Mdse.  for  note  on  demand;  no  interest.     Buy  on  same  terms. 

Discount  above  note  at  bank  at  8  %,  collection  1  %. 

Buy-  stationery,  $10.     Coal  for  office,  $30. 

Sell  two  tons  Coal  for  cash  to  accommodate  neighbor,  $15. 

Post,  take  a  Trial  Balance,  and  prove  Cash.  You  may  now  sell  to  each  of  two  addi- 
tional partners  a  one-fourth  interest  in  j^^z^r  share  of  the  business.  They  will  give  you  their 
notes  at  90  ds.,  with  interest  at  6  %  for  the  amount.  You  and  your  partner  are  each  to  with- 
draw by  check  an  amount  equal  to  3  %  of  Mdse.  sales  since  last  partnership  was  formed  as 
your  share  of  the  profits  to  date.  The  new  partners  are  "silent  partners,"  therefore  the  firm 
name  is  unchanged. 

O  41.  Exchange  your  old  Desk  for  a  large  new  one,  paying  the  difference  in  cash,  $75. 
Buy  another  large  Desk,  $85,  and  a  Typewriter  and  Desk,  $135,  on  account,  30  ds. 

O         42.     Sell  2  cards  each,  Tea,  Coffee,  Cocoa,  and  Sugar,  on  account,  60  ds.     ^uy  on  same 

terms. 

O  43.  Sell  2  cards  Sugar,  2  of  Baking  powder,  2  of  Catsup,  and  2  of  Worcestershire  sauce 
for  $200  cash,  bal.  on  acct.     Buy  on  same  terms. 

O  44.  Xurn  your  Real  Estate,  which  you  purchased  as  your  private  property,  into  the  firm 
for  cash  at  an  advance  of  $250  on  original  cost.  Pay  off  your  Mortgage  and  interest  with  your 
private  funds  and  get  same  released  and  deed  recorded. 

O  45.  Sell  Mdse.  for  account,  60  ds.,  and  accept  as  part  payment  note  held  by  buyer.  Re- 
quire him  to  endorse  "  Payment  guaranteed"  with  signature,     ^uy  on  same  terms. 

O  46.  Sell  Mdse.  to  some  student  and  send  same  by  express,  C.  O.  D.  Charge  to  C- 
O.  D.  account.       When  remittance  arrives  Credit  C.  O.  D.  account  in  C.  B.  and  post. 

Note — Should  a  C.  O.  D.  invoice  arrive  for  you,   pay  express  company  by  check  for  both  invoice  and 
express  charges.     Debit  Mdse.  in  C.  B. 

O         47.     Pay  electric  light  and  gas  bill  in  cash,  $7.25.     Draw  check  for  your  own  salary. 

O  48.  Sell  constg?ij/ie?il  received  in  No.  18  for  cash.  Deducts  %  commission  for  selling 
and  remit  proceeds  to  shipper.     Eook  after  proceeds  of  your  shipment  in  No,  18. 

O  49.  Sell  to  Com'l  Exchange  on  acct.  60  ds.  all  Mdse.  bo't  of  floor  students.  If  this  bill 
is  correct,  you  will  be  entitled  to  1  %  advance  on  amt.  of  bill. 

O  50.  You  may  now  post,  take  Trial  Balance,  prove  Cash,  reconcile  your  bank  account, 
and  make  out  Balance  Sheet,  dividing  the  net  loss  or  gain  in  proportion  to  the  net  investments 
of  each  partner.     Clean  books  and  present  them  for  inspection  and  record. 


78 


BUSINESS    PRACTICE    BOOKKEEPING 
SPBCIAI,  COI^UMN  JOURNAI, 


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MDSE.        SUNDKIES      v' 


TITLE  AND    EXPLANATION 


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BUSINESS    PRACriCE    BOOKKEEPING  79 

SPBCIAly     COI^UMN    JOURNAI< 

280.  Special  Columns  in  Journals,  Cash  Books,  Sales  Books,  Invoice  Books,  etc.,  for 
the  purpose  of  classifying,  simplifying,  and  lessening  the  work  of  the  bookkeeper  are  features  of 
all  modern  accounting. 

281.  The  Special  Colunms  necessary  in  the  books  of  any  concern  depend  entirely  upon  the 
nature  of  the  business  transacted.  Mercantile  business,  banking,  real  estate,  printing,  manu- 
facturing, etc.,  are  entirely  different  in  character  and,  of  course,  need  wholly  different  treatment 
in  recording  the  business  of  each  concern. 

282.  Scarcely  any  two  business  houses  doing  the  same  kind  of  business  keep  their  books 
exactly  alike.  The  object  of  a  course  in  accounting  is  to  prepare  a  student  so  that  he  is  able  to 
understand  and  even  devise  special  books  and  forms  applicable  to  the  particular  business  in  hand. 

283.  The  Special  Column  Journal  presented  here  is  a  simple  modification  of  the  ordi- 
nary Journal  with  special  columns  for  Cas/i  and  Merchayidise. 

284.  Xhis  Sook  is  recommended  for  that  class  of  small  business  requiring  a  limited 
amount  or  bookkeeping;  such  as  retail  groceries,  bakeries,  millinery  shops,  etc. 

285.  It  is  here  used  to  keep  the  records  of  a  small  Branch  Hotae  doing  a  general  busi- 
ness, and  is  provided  with  six  columns.  A  greater  number  of  columns  may  be  used  if  the  nature 
of  the  business  should  so  require. 

286.  The  F'ootings  of  the  Cash  and  Mdse.  columns  are  posted  at  the  close  of  the  day, 
week,  or  at  the  pleasure  of  the  bookkeeper.  In  sundries  columns  are  placed  the  debits  and  credits 
of  all  accounts  except  Cash  and  Mdse. 

287.  Post  the  Items  from  the  sundries  columns  to  their  proper  accounts  in  the  Ledger, 
checking  each  item  as  posted. 

288.  In  Opening  this  Book,  all  Resources  and  all  I^iabilities  are  placed  in  sundries  col- 
umns and  posted  direct  to  the  Ledger.      All  such  opening  statements  should  balance. 

289.  Other  Books:     Should  the  volume  of  business  warrant,  a  Sales  Book  and  an  Invoice 

Book  may  be  used;  the  itemized  details  of  all  sales  and  purchases  being  recorded  in  these  books 
and  summaries  only  entered  in  the  Special  Column  Journal. 

290.  The  usual  Bank  Books,  Notes  Receivable  and  Payable  Book,  and  Balance  Book,  to- 
gether with  the  ordinary  blanks  used  in  mercantile  transactions  are  necessary  in  the  Branch 
House  office. 

Promissory  Note  Payable  in  U.  S.  Gold  Coin 


^^ ^'■"'        ^§Mn0m^i€dar.    (/rz^riy  /^^  y^/3.. 


V 


.aaaip— 11^:^. 


80 


BUSINESS    PRACTICE    BOOKKEEPING 


290a.  A  Statement  of  Account  is  a  summary  of  the  dedifs  and  credits  of  a  personal 
account  as  shown  by  the  ledger. 

290b.    Well  conducted  business  houses  render  these  statements  to  their  creditors  at  least  once 
per  month. 

FORM  OF  STATFMFNT  OF  ACCOUNT 


STATEMENT 


DATE       ^ay  1'    191-' 


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To 


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290c.   A  Memorandum  of  Credit  is  a  voucher  showing-  certain  credit  allowed, 
usually  for  an  overcharge,  rebate  allowed,  or  for  regular  credit. 

FORM  OF  MEMORANDUM  OF  CRFDIT 

A.  J.  FUSCHiA  &  COMPANY 


It  is 


T 


SALESMAN 


C-^/^^;^:^^«^2^ 


/j^^-f-T-Z^Z-^Z-'l^^^ 


CREDIT    MEMORANDUM 

Chicago,  Ili...     J^"-   ^5,    1915. 

f^         E.  V.   GRANT  &  COMPANY, 

San  Francisco,  Cal. 


WE  CREDIT  YOUR  ACCOUNT  AS  FOLLOWS: 


O  Copy  the  above  and  hand  in  a  sample  of  your  best  work  for  inspection  and  record. 


SET    VII. 

Actual  Business  Practice 

BRANCH     HOUSE 

291.  Its  Purpose:  The  purpose  of  this  set  is  to  exemplify  the  use  of  the  Special  Col- 
■jimn  Joiirnal  2lS  a  book  of  original  entry,  and  to  illustrate  a  system  of  handling  a  Branch  House 
business. 

292.  Books  Used:    The  principal  books  used  in  this  set  are  Special  Column  Journal 

and  L,edger  together  with  the  auxiliary  Blank  Books  and  Notes  Receivable  and  Notes  Payable 
Book.     The  Sales  Book  and  Invoice  Book  are  sometimes  used. 

293.  Principal  Features: 

1.  How  to  open  the  books  from  statement  furnished  by  Main  House. 

2.  Use  of  Sales  Book  and  Invoice  Book. 

3.  Accounts  with  Main  House. 

4.  Signature  of  Branch  House  by  Manager. 

5.  Posting,  checking,  and  footing. 

6.  Proving  Cash  and  reconcilement  of  bank  account. 

7.  Trial  Balance  and  Balance  Sheet. 

8.  Rendering  final  statement  and  closing  the  Ledger. 

294.  Two  Sets  of  Books:  You  will  have  charge  of  both  your  own  business  and  that 
of  the  Branch  House.     You  are  to  keep  both  sets  of  books  strictly  up  to  date. 

295.  The  Instructions  printed  in  Italics  refer  to  your  former  business  and  those  printed 
in  Roman  type  to  that  of  the  Branch  House. 

296.  The  Manager  signs  all  checks,  notes,  receipts,  etc.,  with  the  name  of  the  Branch 
House,  by  his  own  name  as  manager;  thus,  ''Smith's  Branch  House''  by  A.  B.  Chapman,  Man- 
ager. ' ' 

297.  All  bills  and  statements  should  be  made  out  to  the  Branch  House;  and  all  checks, 
notes,  etc.,  should  be  made  payable  to  the  Branch  House  and  not  to  the  Manager. 

298.  Prove  each  page  of  work  in  the  Journal  by  adding  the  totals  of  the  Cash,  Mdse.,  and 
Sundries  ^<?^/7.s',*which  should  equal  the  sum  of  the  totals  of  the  credits.     Rule  as  in  model. 

299.  The  principle  of  the  Special  Column  Journal  may  be  extended  to  the  use  of  seven, 
eight,  and  even  many  special  columns  if  the  nature  of  the  business  should  seem  to  require  them. 

300.  Speed:  Greater  speed  is  expected  of  the  student  as  he  is  now  supposed  to  under- 
stand fully  the  general  principles  of  bookkeeping.  The  time  necessary  to  complete  this  Set  should 
be  carefully  noted  and  recorded. 


82  BUSINESS    PRACTICE    BOOKKEEPING 

GUIDE    NO.    7,    SBT    VII.    Boots  and   Shoes 

BRANCH  HOUS:e  BUSINi^SS 

Note — The  routine  of  work  for  your  own  business  is  printed  in  Ita.lic  type.     Keep  the  Branch  House 
business  clearly  separated  from  your  former  partnership  business. 

O  !•     Read  again  all  that  has  been  presented  in  regard  to  the  books  to  be  used  in  this 

set.  This  being  a  simple  and  brief  method  of  accounting,  your  books  should  be  exceptionally 
neat  and  accurate. 

O  2.     You  will  find  some  student  in  Set  X,  Wholesale,  or  Commission  who  will  start  you 

in  business  by  giving  you  Mdse.,  Cash,  Fur.  and  Fix.,  a  Note  Receivable,  and  one  or  more 
Accounts  Receivable  as  Assets;  he  will  also  provide  you  with  one  or  more  liabilities,  the  differ- 
ence of  which  will  be  the  present  worth  of  the  Branch  House. 

Note — Ask  him  to  render  you  a  correct  statemeni  of  the  same.     Check  it  off  and  see  that  it  is  correct. 

O  3.     Make  your  opening  entry  in  your  Special  Cohnnn  Journal  and  rule  it  as  in  model. 

O  4.     You  will  open  the  lycdger   by  posting  the  items  of  the  opening  statement.     Check 

each  item. 

O  5.     Order  by  letter,  enclosing  order  sheet,  a  stock  of  the  latest  styles  of  shoes,  5  cards 

of  each  kind,  on  acct.  60  ds. 

O  6.     Deposit  the  Branch  House   funds  in  a  different  bank  from  the  one  you  regularly 

patronize.     Get  a  check  book. 
O  7.     Buy  Office  Fixtures  for  cash.     Desk,  $20;  Safe,  $70;  I^etter  File,  $55. 

O  8.     Telegraph  for  six  pairs  Ladies'  Pat.   Kid  Oxfords,  Size  4,  to  be  sent  by  express, 

C.  O.  D. 
O  9.     Sell  a  small  bill  of   Mdse.  from  the  stock  received  from  the  Main  House.      'Buy  a 

small  bill  of  Mdse. 
O         10-     -5«JK  out  your  partners .     Pay  each  of  them  his  present  worth  in  cash.      {Old  books. ^ 

J? eceive  goods  ordered  in  No.  5,  pay  freight  and  make  the  two  entries  in  the  Journal. 
Sell  one  card  each  of  3  kinds  of  Shoes  on  account,  30  ds.     Buy  on  same  terms. 
Sell  2  cards  each  of  2  kinds  of  Shoes  for  cash.     Buy  on  same  terms. 
Pay  one  of  yo7ir  old  accounts  in  full  by  check.     Also  collect.      {.Old- books .^ 
Sell  3  different  kinds  of  Mdse.  for  note.     Buy  on  same  terms. 

Sell  3  different  kinds  of  Mdse.    for  part  cash,   balance  on  account,    60  ds.     Buy  on 
same  terms. 
O         17.     Sell  to  some  student,  C.  O.  D.,  2  kinds,  3  cards  each;  send   by  express.     Buy  on 

same  terms. 
O         18.     Remit  wholesaler  $300  on  account.    Pay  Exchange  and  order  more  goods  if  needed. 
Sell  to  Com'l  Exchange  all  B.  H.  Mdse.  bo't  of  floor  students. 
Collect  cash  of  Com'l  Exchange.     Give  discount. 
Discount  at  bank  all  B.  H.  notes  not  yet  due. 

Collect  all  accounts  of  old  business  now  due.  ' 

Pay  all  accts.  of  old  business  now  due,  by  check. 
Sell  several  kinds  of  Shoes  for  cash  and  draft  on  Com'l  Exchange.     Bziy  on  same 

Asi:  some  one  whom  you  owe  to  draw  on  you  at  30  ds.  sight.     Accept  the  same. 
Draw  on  some  one  who  owes  you  in  favor  of  some  one  whom  you  owe. 
Draw  on  Com'l  Exchange  in  favor  of  wholesaler,  payable  at  sight. 


o 

11. 

o 

12. 

o 

13. 

o 

14. 

o 

15. 

o 

16. 

o 

19. 

o 

20. 

o 

21. 

o 

22. 

o 

23. 

o 

24. 

terms. 

o 

25. 

o 

26. 

o 

27. 

BUSINESS    PRACTICE  BOOKKEEPING  83 

O         28.     Sell  3  diiferent  kinds  of  Mdse.  for  %  cash,  Va  draft,    balance  on  acct.,  60  ds.     Buy 
on  same  terms. 

O         29.     Sell  to  Com'' I  Exchange  all  but  5  cards  of  the  Mdse.  of  the  old  business,  on  acct.,  60  ds. 

O         30.      Order  of  wholesaler  goods  as  your  business  requires.     Pay  freight,  and  be  sure  to 
"check  off"  every  bill  correctly. 

O  31.  Sell  8  cards,  4  kinds,  on  acct.,  30  ds.      'Suy  on  same  terms. 

O  32.  Sell  6  cards,  3  kinds,  for  cash.     Biiy  on  same  terms. 

O  33.  Se7id  out  statements  to  all  old  customers  who  owe  yoti. 

O  34.  Sell  for  cash  and  note  at  30  ds.,  3  kinds  of  Mdse.     Buy  on  same  terms. 

O  35.  Sell  to  Com'l  Exchange  for  cash,  >^  the  Mdse.  bo't  of  floor  students. 

O  36.  Pay  Notes  Payable  due,  and  interest  on  same.      Collect  on  Notes  Rec.  and  Int. 

O  37.  Send  the  Main  House  $1000  out  of  B.  H.  funds.      (Charge  to  B.  H.  account.) 

O  38.  Pay  all  accounts  30  days  old  by  check  or  note.     Collect  ditto. 

O  39.  Sell  to  Com'l  Exchange  your  office  fixtures  at  a  discount  of  20  %  for  cash. 

O  40.  Buy  of  Com'l  Exchange  a  Cash  Register  for  the  Main  House,  by  check,  $275.  Send 
it  by  express. 

O  41.  Sell  one  card  each,  5  different  kinds,  of  Shoes  to  some  student,  V2  cash,  balance  on 
acct.,  30  ds.     Buy  on  same  terms, 

O         42.     Sell  on  acct.,  30  ds.,  V2  the  Mdse.  bo't  of  floor  students. 

O  43.  Send  the  Main  House  12  cards,  6  kinds,  in  preparation  of  closing  out  business.  Be 
sure  to  bill  same  at  cost  prices. 

O         44.     Collect  on  2  accounts,  give  discount.     Pay  ditto. 

O  45.  Receive  instructions  from  Main  House  to  collect  a  bill  due  them  and  collect  the 
same.     Keep  the  money.     Receipt  the  bill  and  render  statement  to  Main  House. 

O  46.  Pay  a  bill  for  the  Main  House  by  check.  Get  receipted  bill,  make  entry  and  re- 
port to  M.  H. 

O         47.     Draw  your  salary  as  manager  of  B.  H.,  $100.     Expense  Dr. 

O         48.     Pay  Rent  of  Store,  $100;  Clerk's  Salary,  $75;  Stationery,  $10;  in  cash. 

O  49.  Post,  prove  Cash,  take  a  TriaJ  Balance,  make  out  Balance  Sheet,  and  close  the  ac- 
counts that  show  a  loss  or  gain. 

O  50.  Make  out  Closing  Stateme?it,  enter  in  Journal,  post  and  close  the  Ledger.  Turn  all 
property  and  accounts  over  to  the  Main  House  with  statement.  Present  your  books  for  criti- 
cism and  record. 


Single     Entry    Bookkeeping 

301.  Single  Entry  Bookkeeping  differs  from  Do^ible  Entry  in  several  distinguishing 
features: 

1.  Only  one  debit  or  one  credit  is  made  to  each  transaction. 

2.  Ov\y  personal  accounts  are  journalized  and  posted  to  the  Ledger. 

3.  No  Balance  Sheet  is  possible  as  the  total  debits  and  credits  are  never  equal. 

4.  No  property  nor  allowance  accounts  are  kept;   the  loss  or  gaiyi  being  determined 
from  statements  showing  the  difference  between  the  Net  hives tme7ii   and  the  Present  Worth.     . 

302.  No  Merchandise,  Expense,  or  other  accounts  that  in  double  entry  show  a  loss  or 
gain  are  kept,  except  for  reference,  and  no  Trial  Balance  can  be  taken. 

303.  The  'Net  Investment  is  the  difference  between  the  total  Resources  and  the  total 
Liabilities  at  the  begi7ining  of  business  as  shown  by  the  opening  statement. 

304.  The  Present  Worth  is  the  difference  between  the  total  Resources  and  the  total 
Liabilities  at  the  close  of  business  as  shown  by  the  statement. 

305.  The  I/OSS  or  Gain  is  the  difference  between  the  JVet  Investment  and  the  Present 
Worth. 

306.  In  the  Journal  is  entered  every  transaction-  that  affects  personal  accounts ,  and  only 
such.  If  Persons  are  to  be  debited  or  credited  in  any  manner,  an  entry  should  be  made  in  the 
Journal. 

307.  Post  only  from  the  [ournal.     The  Journal  is  paged  regularly  and  consecutively. 

308.  The  Journal  has  two  money  columns.  The  first  is  the  item  column  for  extensions 
only;  the  second  contains  both  Debit  and  Credit  totals.  Whether  a  person  is  debited  or  credited  is 
indicated  by  placing  Dr.  or  Cr.  after  his  name. 

309.  Sales  are  either  entered  with  prices,  extensions,  and  amounts  written  in  full,  or 
reference  is  made  to  the  complete  memoranda  in  a  Sales  Record  dated  and  numbered. 

310.  Purchases  are  entered  by  referring  to  the  number  of  the  invoice.  All  Invoices 
should  be  numbered  and  filed  for  reference. 

311.  All  cash,  notes,  and  drafts,  either  given  or  received  on  account  should  be  entered  in 
the  Journal. 

312.  Sometimes  a  Day  Book,  or  Blotter,  as  it  is  sometimes  called,  is  used  to  record  the 
business  of  the  day,  and  from  it  the  Journal  and  Cash  accounts  are  taken. 

313.  In  the  Cash  Book  is  entered  every  item  of  Cash  received  or  paid  out. 

314.  The  Single  Page  Cash  Book  has  but  two  money  columns. 

1.  Theyzrj-/  or  left  hand  column  contains  the  "  Cash  on  hand''  together  with  all  cash 
receipts  of  the  business. 

2.  The  second  contains  the  overdraft  (if  any)  and  all  cash  payments  of  the  business. 

315.  Cash  received  or  paid  on  account  is  also  entered  in  the  Journal,  from  which  it  is  post- 
ed to  the"  Ledger. 

316.  When  cash  items  are  transferred  from  the  Cash  Book  to  the  Journal  they  should  be 
checked  as  shown  in  the  model. 

317.  Sales  for  Cash  consisting  of  one  item  only  may  be  entered  directly  in  the  Cash 
Book.  Cash  Sales  of  two  or  more  items  should  be  made  out  in  duplicate,  properly  timed  and 
numbered.     The  copy  should  be  kept  and  filed  for  reference. 


BUS/N£:SS    PRACTICE    BOOKKEEPLWG 


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318.  The  Cash  Register  is  almost  indispensable  in  a  business  of  any  size,  and  from  it 
.ne  Cash  Sales  of  the  day  are  recorded  in  the  Cash  Book. 

319.  The  student  should  study  the  entries  in  the  Model  Cash  Book,  noting  particularly  the 
phraseology  of  each  entry.  They  should  be  so  clearly  stated  that  a  stranger  to  the  business 
could  readily  understand  the  meaning. 


SET    VIII. 

Actual  Business   Practice 

323.  Object:  The  object  of  this  Set  is  to  illustrate  a  simple  method  of  keeping  accounts 
with  persons  only.  Accounts  with  property  and  allowances  are  not  kept  except  as  memorandum 
records. 

324.  In  changing  from  Doitble  Eiitry  bookkeeping  to  Single  Entry  it  is  necessary  to  drop 
all  property  and  allowance  accounts  from  the  L,edger,  retaining  only  the  personal  titles  in  that 
book. 

325.  The  Bank  Account  is  kept  the  same  as  in  previous  work.  All  checks  returned 
and  Copies  of  all  Deposit  Slips  should  be  filed  away  for  future  reference. 

326.  The  Notes  Receivable  and  Payable  Book  is  a  very  important  book  in  single 
entry  and  should  be  accurately  kept  and  strictly  up  to  date. 

327.  The  special  features  presented  in  this  Set  are  as  follows: 

1.  How  to  open  a  set  of  single  entry  books. 

2.  The  use  of  the /otirjial,  Cash  Book  and  Ledger  as  principal  books. 

3.  The  use  of  the  'Sank  Books,  Notes  Receivable  and  Payable  'Book,  Inventory  Sheets,  car- 
bon  copies,  and  other  vouchers  as  memorandum  records. 

4.  The  systematic  filing  of  all  records  and  vouchers, 

5.  The  computing  of  trade  and  cash  discounts. 

6.  How  to  post  from  the  Journal. 

7.  How  to  make  out  an  accurate  statement  of  the  Resources  and  Liabilities  to  find  the 
Present  Worth. 

8.  How  to  find  the  true  Loss  or  Gain. 

328.  Accuracy  in  Single  Entry  is  absolutely  necessary.  The  slightest  error  means  a  loss 
to  some  one,  and  all  errors  by  students  in  this  Set  will  be  a  double  charge  against  his  record. 

329.  Study  the  discussions  and  forms  well  before  trying  to  do  the  work  as  outlined  in 
Guide  VIII.     If  you  do  not  have  a  clear  idea  of  them,  consult  your  teacher. 


88  BUSINESS    PRACTICE    BOOKKEEPING 

GUIDB    NO.   8,     SBT    VIII.     Single  Entry- -Common  Form 

hardwar:^   busin:isss 

Note — Make  the  work  of  this  Set  so  perfect  that  your  final  Statement  will  be  without  criticism.    Four- 
fifths  of  the  country  stores  use  single  entry  bookkeeping.     Give  it  your  best  efi^ort. 

O  1-      Open  yonr  Journal  vjiih.  a  complete  statement  of  your  own  Resources  and  Liabilities 

as  shown  at  the  close  of  Set  VII.     Be  absolutely  accurate  in  this  statement. 

O  2.     Post  to  the  Ledger,  Personal  items  only.     No  property  nor  allowance  titles  will  be 

opened  in  the  I^edger. 

O  3.      Open  the  Cask  Sook  with    "  Cas/i  on  hand^^  in  the  debit  column;    or  if  an    "  Over- 

draft, ' '  in  the  credit  column. 

O  4.     ^izy  Letter  File  Cabinet,    $55,   for  cash.     C.  B.     Number  and  file  all  bills  on  first 

page  of  Invoice  Book. 

O  5.      Order  by  letter  of  wholesaler,  5  cards  each  of  5  different  kinds  of  hardware,  ask- 

ing his  best  trade  and  cash  discounts.     Fill  out  order  sheet  complete  and   enclose  with  letter. 
Note — All  items  of  Mdse.   in  the  Hardware  Business,  both  wholesale  and  retail,  are  subject  to  the 
trade  discounts  as  indicated  on  the  Market  Quotations  Card.     Be  careful  to  compute  these  discounts  accur- 
ately. 

Pay  stationery  bill  in  cash,  $10;   also  printing  bill,  $3.50. 

Buy  a  National  Cash  Register  by  check,  $275. 

Sell  one  of  your  typewriters  and  desk  at   20  %  discount,  to   Com'l  Exchange,    for 


o 

6. 

o 

7. 

o 

8. 

cash 

. 

o 

9. 

o 

10. 

Pay  teacher  $15  by  check  for  repairs  on  Motor  Car. 

Sell  to  Com'l  Exchange  for  cash  all  the  old  Mdse.  left  from  your  old  Grocery  Busi- 
ness.    Give  them  a  discount  of  2  % . 

O         11-     Receive  the  goods  ordered  in  No.  5,  pay  freight,  check  off  invoice,  and  note  if  all 
discounts  are  correctly  estimated. 

O         12.     Remit  wholesaler  $500  by  bank  draft,  on  acct.  to  apply  on  the  above. 

O         13.     Sell  for  cash  to  some  student  2  cards  each  of  3  kinds  of  hardware;    giving  proper 
discounts.     Buj/  on  same  terms. 

O         14.     Sell  6  cards,  3  kinds,  on  acct.,  60  ds.     Buy  on  same  terms. 

O         15.     Buy  of  some  student  a  small  bill  for  cash.     Sell  ditto.     Compute  your  discounts 
correctly. 

O         16.     Order  by  letter  of  wholesaler  5  cards  each  of  10  different  kinds  of  hardware.    Fill 
out  order  sheet  and  enclose  with  letter. 

O         17.     Sell  3  kinds  of  hardware,  V2  cash,  balance  on  account,  30  ds.     Buy  on  same  terms. 

O         18.     Buy  3  kinds  of  hardware  for  note,  with  int.  at  7  %,  90  ds.     Sell  on  same  terms. 

O         19.     Sell  to  Com'l  Exchange  a  bill  of  Mdse.   bo't  of  floor  students.     You  get  1  %  ad- 
vance if  absolutely  correct. 

O         20.     Sell  to  Com'l  Exchange  one  of  your  office  desks  on  acct.,   30  ds.     Give  10  %  dis- 
count.    Also  surrender  your  Coal  Card,  the  fuel  being  consumed. 

O         21.     Receive  goods  ordered  in  No.    16,    pay  freight,  check  off  items  and  compute  dis- 
counts. 

O         22.     Remit  cash  for  balance  due  on  invoice  bo't  in  No.  11. 

O         23.     Sell  4  kinds  of  hardware  on  acct.,  30  ds.     Btiy  on  same  terms. 

O         24.     Sell  3  kinds  of  hardware,  part  cash,  balance  on  account,  30  ds.    Bi^y  on  same  terms. 

O         25.     Pay  Clerk's  Salary  (to  some  student)  by  check,  $12. 


BUSINESS  PRACTICE  BOOKKEEPING  89 

O         26.     Another  clerk   Canother  student)   has  one  week's  salary,  $20,  due,  but  does  not  want 

the  cash.     Credit  him  in  Journal.     Notify  him. 
O         27.     Sell  for  cash  and  note  3  kinds  of  hardware   to  some  student.     Bjty  on  same  terms. 
O         28.      Collect  cash  on  account.     Pay  ditto. 
O         29.      Give  the  Com'l  Exchange  your  note  for  $400  with  interest  at  6  %  for  90  ds.,  paya- 

])le  at  their  bank. 
O         30.     Buy  3  kinds  of  hardware  on  account,  30  ds.     Sell  o\\  .same  terms. 
O         31.     >Se//  4  kinds  of  Mdse.,  for  note  and  cash.     Buy  ditto. 

Telegraph  for  20  kegs  Steel  Wire  Nails,  to  be  sent  C.  O.  D. 

Draw  out  $100  in  currency  for  Office  Use. 

Pay  at  Com'l  Exchange  one  month's  rent  in  cash,  $100. 

Sell  9  cards,  3  kinds,  of  hardware  to  some  student  for  cash  and  draft  on  Com'l  lix- 

Buy  on  same  terms. 

Give  some  student  your  note  on  account. 

Receive  a  note  of  some  one  who  owes  you  on  account. 

Send  Com'l   Exchange,    by  express,    C.    O.    D.,  a  large  bill  of  Mdse.  bo't   of  floor 

Draw  a  draft  on  Com'l  Exchange  and  remit  it  to  your  wholesaler  on  account. 
Accept  a  draft  drawn  on  you  by  some  wholesaler.  Notify  him  to  draw  same. 
Sell  6  cards,  2  kinds,  of  hardware  to  some  student  on  acct.,    30  ds.     Buy  on  same 

Send  a  consignment  Steel  Wire  Fence  to  some  commission  merchant  to  be  sold  on 
your  acct.  and  risk. 

O         43.     J?eceive  a  consignment  from  some  commission  merchant   "on  sale."     Pay  freight. 

O  44.  »Se7/  the  above  and  make  out  account  sales.  Deduct  your  commission  of  5  %  and 
remit  proceeds  to  the  consignor. 

O         45.     Sell  to  Com'l  Exchange  one-half  the  goods  bo't  of  floor  students  on  acct.,  30  ds. 

O         46.     liliy  a  bill  of  4  kinds  of  Mdse.  for  cash.     Sell  on  same  terms. 

O         47.      Collect  all  personal  accounts  d?^e.     Render  statements  and  receipt  same  when  paid. 

O  48.  Pay  all  personal  accounts  due.  Ask  for  statements  and  have  same  receipted  when 
paid. 

O         49.     Sell  to  Com'l  Exchange  for  cash  all  Mdse.  on  hand  bo't  of  students  on  the  floor. 

O  50.  Post,  prove  and  balance  cash,  make  out  a  complete  inventory  of  all  property  on 
hand,  and  render  a  final  statement  showing  the  Resources,  Liabilities,  Present  Worth,  Net  In- 
vestment, and  the  Net  Loss  or  Net  Gain.     Present  your  books  for  final  O.  K.  and  record. 


o 

32. 

o 

33. 

o 

34. 

o 

35. 

change. 

o 

36. 

o 

37. 

o 

38. 

students 

o 

39. 

o 

40. 

o 

41. 

terms. 

o 

42. 

90 


BUSINESS  PRACTICE  BOOKKEEPING 


SINGI.B    BNTRY     STATEMENT 

330.  A  Statement  in  Single  Entry  consists  of  a  list  of  the  total  Resources  and  total  Lia- 
bilities  of  the  business.     Their  difference  is  the  Present  Worth  or  Net  Insolvency  of  the  firm. 

331.  To  find  the  Loss  or  Gain,   take  the  difference  between   the  Net  Investment,  or  Net 
Credit  at  the  beginning  of  the  business,  and  the  Present  Worth. 

FORM    OF    SINGi;:i5    l^NTRY    STAT]BM:RNT 


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332.  Caution:  In  ascertaining  the  total  Resources  and  total  Liabilities  of  the  business, 
great  care  should  be  taken  in  making  these  lists  complete  and  accurate.  If  any  account  or  in- 
ventory be  omitted,  the  loss  or  gain  cannot  be  found. 


Advanced  Single  Entry 


333.  The  Advanced  System  of  Single  Entr}^  Bookkeeping  here  described  and  illustrated 
is  intended  to  suggest  a  method  of  keeping  the  accounts  of  an  extensive  business  when  the  pro- 
prietor does  not  desire  to  keep  a  full  double  entry  set. 

334.  Besides  the  Journal,  Cash  Book,  and  Ledger  as  used  in  the  preceding  set,  an  Order 
^ook,  an  Invoice  'Sook,  and  a  Double  Page   Cash  Book  are  introduced  as  books  of  original  entry. 

335.  In  the  Order  Sook  is  entered  each  order  received  for  Mdse.  sold  for  cash,  on  ac- 
count, or  otherwise,  and  the  same  becomes  a  sale  as  soon  as  the  goods  are  delivered.  The  Order 
'Sook  is  therefore  the  Sales  'Book  of  single  entry  bookkeeping. 

FORM  OF  TH:e  ORDFR  BOOK 


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336.  Three  Money  Columns  are  illustrated  in  the  form  here  given.  The  first  is  the 
column  for  extensions,  the  second  is  for  cash  sales,  and  the  third  for  sales  on  account.  Sales 
other  than  for  cash  or  on  account  are  footed  in  the  column  for  extensions. 

337.  The  Terms  of  Sale  are  written  at  the  left  and  should  always  be  clearly  indicated. 
The  Dale  may  be  written  at  the  center  as  in  the  Journal. 

338.  Sales  for  Cash  are  transferred  to  the  Cash  Book  at  the  close  of  the  day  as  ' '  Cash 
Sales  per  Order  Book. ' ' 


339.     Sales  on  Account  are  summarized  in  the  Journal  and  are  posted  from  that  book. 


92 


BUSINESS  PRACTICE  BOOKKEEPING 


340.  Sales  Slips  consisting  of  the  original  and  a  carbon  copy  of  the  sale  are  more  con- 
venient for  most  businesses  and  are  in  universal  use. 

341.  The  Cash  Book  is  the  same  as  described  and  illustrated  on  page  86.  A  Double  Page 
Cash  'Book  is  also  used  in  the  last  half  of  Set  IX. 

342.  The  Double  Page  Cash  Book  is  identical  in  form  to  the  ^.ne  shown  on  pages  58 
and  59,  with  the  exception  of  the  following: 

1 .  The  Jirs^  or  left  hand  money  column  on  each  page  is  for  cash  received  or  paid  on 
account. 

2.  The  second  or  right  hand  money  column  on  each  page  is  for  all  other  cask  items. 

3.  The  meyjwranda,  instead  of  giving  ledger  title  and  explanation  as  in  double  '^ntry,  is 
written  similar  to  that  in  the  single  page  Cash  Book.  p.  86. 

343.  In  the  Journal  are  entered  all  items  affecting  personal  accounts  only,  jgettier  with 
SUininaries  horn  the  Order  Book,  Cash  Book,  and  Invoice  Book  oi  all  items  a^i^.ting  personal 
accounts  found  in  those  books. 

FORM    OF    ADVANCFD    JOURNAI/ 


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O        Copy  the  above,  and  hand  to  your  teacher  your  best  work  for  inspection  and  record. 


BUSINESS    PRACTICE    BOOKKEEPING  93 

344.  The  Invoice  Book  or  Invoice  File  is  used  to  receive  all  bills  or  invoices  purchased, 
and  transfers  and  summaries  of  cash  and  account  items  are  made  to  the  Cash  ^Boo\  and  Journal 
respectively. 

345.  The  >SiUiZ2l2iaries  entered  in  the  Joicrjial  are  taken  from  the  Cash  Book,  Order  ^ool', 
and  Invoice  ^ooTc  and  consist  of  all  items  that  affect  Personal  Accounts  as  follows: 

1.  From  the  Cash  'SooJc,  all  items  of  cash  received  or  paid  07i  accoimt,  with  date,  check 
folio,  and  name  of  person  to  be  charged  or  credited. 

2.  From  the   Order  Book,  the  amount  of  each  sale  on  account,  together  with  date,  check 
folio,  and  name  of  person  to  be  charged. 

3.  From  the  Invoice  Book,  the  amount  of  each  purchase  on  account,   together  with  date, 
check  folio,  and  name  of  person  to  be  credited. 

4.  Original  Journal  Entries,    those   that   affect    personal   accounts  only,   and    are    not 
taken  from  the  other  books;  such  as  opening  entries,  notes  given  or  received  on  account,  etc. 

346.  I*OSt  from  the  Jour7ial  only.  The  object  of  summarizing  is  to  condense  all  the  ac- 
coicnt  items  into  one  book  that  posting  may  be  simple  and  direct. 

347.  Postings  may  be  made  directly  from  the  books  of  original  entry.  When  this 
method  is  pursued,  it  is  not  necessary  to  summarize  in  the  Journal. 

Advanced  Single  Entry  Practice 

Note — The  student  will  make  the  following  entries  in  the  proper  books  and  summarize  all  entries  af- 
fecting personal  accounts. 
O  1-     Sold  W.   E.   Norris,  Boston,   on  account,    30  ds.,   40   boxes  Gravenstein  Apples  @ 

$1.25;  21  boxes  Bellefleurs  @  85|^  per  box. 
O  2.     Sold  D.  M.  Bryant,   Denver,  for  cash,  50  crates  of  Strawberries  @   $2.40;    24  boxes 

Cherries  @  35|^. 
O  3.     Sold  A.    M.    Grouse,   Los   Angeles,    for  note  at  90  ds.,  100  boxes  Bartlett  Pears  @ 

$1.45;  120  boxes  Winter  Nellis  @  $1.35. 
O  4.     Sold  J.  M.  Goodyear,  Portland,  on  account,  50  ds.,  75  bu.  Burbank  Potatoes  @  80j^; 

54  bu.  Seed  Barley  @  95^. 
O  5.     Gave  H.  B.  Angwin  my  note  on  account,  60  ds.,  $423.50. 

O  6.     Received  of  Val  Watson,  his  note  at  60  ds.,  on  account,    $210. 

O  7.     Percy  Tomlinson,  our  bookkeeper,  did  not  draw  his  salary  this  month  and  the  same 

is  placed  to  his  credit,  $125. 
O  8.     Bo't,  on  account,  of  the  Elevator  Milling  Co.,  Mdse.  per  Invoice  #52,  $87.60. 

O  9.     Bo't,  on  account,  of  the  Jones  Grocer  Co.,  Mdse.  per  Invoice  #53,  $425.90. 

O         10.     Paid  cash  to  A.  H.  Dana,  on  account,  $300;  to  W.  E.  Norris,  $184.25. 
O         11.     Rec'd  cash  of  J.  E.  Smith,  on  account,  $427.80;  of  Allen  Jones,  $142.50. 
O         12.     Drew  a  sight  draft  on   A.  H.  Dana  for  $200  and  remitted  the  same  to  W.  E.  Norris 

on  account. 


94  BUSINESS    PRACTICE    BOOKKEEPING 

QUESTIONS 

1.  What  are  the  purposes  of  Set  V.? 

2.  Describe  the  Sales  Book. 

3.  What  are  its  advantages? 

4.  How  are  postings  made  from  the  Sales  Book? 

5.  Describe  the  Invoice  Book. 

6.  What  are  its  advantages? 

7.  How  does  the  paging  of  the  Invoice  Book  differ  from  that  of  the  Sales  Book? 

8.  What  is  the  advantage  of  such  paging  of  these  books? 

9.  How  are  postings  made  from  the  Invoice  Book  ? 

10.  What  are  the  purposes  of  Set  VI.? 

11.  What  change  in  the  partnership  interests  are  made  in  this  Set  ?     Explain  in  full. 

12.  What  is  meant  by  receiving  goods   "  On  Sale?"     How  does  it  differ  from  an  ordinary- 
Consignment  ?  * 

13.  What  are  the  functions  of  a  Deed  ?     Of  a  Mortgage? 

14.  What  is  meant  by  the  terms  C.  O.  D.  and  f.  o.  b.? 

15.  How  are  bank  accounts  reconciled  with  your  Cash  Book? 

16.  Describe  the  Special  Column  Journal. 

17.  How  is  the  opening  entry  made? 

18.  How  are  postings  made  from  this  book  ? 

19.  What  is  a  Statement  of  Account,  and  how  often  should  they  be  rendered  ? 

20.  What  is  a  Memorandum  of  Credit,  and  what  does  it  show? 

21.  What  is  a  Branch  House?     A  Principal  House? 

22.  How  should  all  signatures  for  the  Branch  House  be  made? 

23.  Describe  the  correct  method  of  closing  out  a  Branch  House  business. 

24.  How  does  Single  Entry  bookkeeping  differ  from  Double  Entry? 

25.  Describe  the  principal  books  of  Single  Entry. 

26.  What  are  the  principal  features  of    Set  VII.? 

27.  Describe  in  full  a  final  Statement  of  Single  Entry. 

28.  What  new  features  are  introduced  in  Advanced  Single  Entry? 

29.  Describe  the  Order  Book.     The  Journal. 

30.  What  change  in  the  form  of  the  Cash  Book,  also  in  the  method  of  posting,  is  made  in 
Part  Second  ? 

*  The  term  "On  Sale"  is  applied  to  consignments  that  are  replenished  from  time  to  time  by  the  addi- 
tion of  more  goods  of  the  same  kind.  It  is  customary  to  furnish  reports  with  remittances  for  the  amount  due 
at  the  close  of  the  month,  quarter,  or  other  term  agreed  upon. 


SET    IX. 


Actual  Business  Practice 

348.  Object:  The  object  of  this  Set  is  to  illustrate  a  modern  method  of  Single  Entry- 
bookkeeping  which  may  be  used  in  a  business  of  considerable  magnitude.  It  allows  the  intro- 
duction of  the  sales  and  purchase  books,  sales  slips,  cash  registers,  billing  machines,  and  other 
important  devices  aimed  to  economize  the  work  of  the  clerk  and  bookkeeper. 

349.  Books  Used:  Besides  the  Jouryial,  Cash  Book,  and  Ledger  of  the  preceding  Set, 
the  following  are  introduced:     The  Double  Page  Cash  Book,  Invoice  Book,  and  Order  Book. 

350.  Home  Study:  Besides  studying  carefully  the  discussions  of  the  books  used  in  this 
Set,  the  student  should  copy  all  the  matter  of  each  book  in  order  to  fully  understand  every  detail 
of  the  work.     Time  will  be  saved  by  so  doing. 

351.  Summarizing:  This  feature  is  very  prominent  in  ".Part  First"  of  this  Set  and 
should  receive  special  attention.  Summaries  should  be  complete  and  accurate,  as  postings  are 
made  only  from  the  Journal.     Consult  your  teacher  if  you  do  not  understand  this  full}^ 

352.  Part  Second:  In  Part  Second  no  StiviTnaries  are  required,  but  postings  are  made 
directly  from  «// the  books  of  original  entry;  viz.,  the  [ournal.  Cash  Book,  Order  Book,  and  In- 
voice Book. 

353.  Double  Page  Cash  Book:  In  the  second  part  a  change  is  made  from  the  single 
page  form  of  Cash  Book  to  the  Double  Page  form.  Read  again  the  discussions  and  description 
on  page  92. 

354.  As  your  Cash  Book  is  a  leading  book  in  this  Set  as  well  as  in  all  others,  you  will 
prove  your  cash  no  less  than  three  different  times.  These  are  indicated  in  the  Guide.  You  will 
also  reconcile  your  bank  account  at  the  close  of  the  Set. 

355.  Pinal  Statement:  Your  final  statement  should  be  absolutely  correct,  not  only  to 
show  the  true  loss  or  gain,  but  from  it  you  must  make  out  your  opening  entry  in  Set  X,  chang- 
ing from  single  to  double  entry.      "  Be  sure  you  are  right,  then  go  ahead." 


Note — The  student  will  especially  note  the  form  of  the  above  opening  entry.  The  Resource  Titles  with 
their  explanations  and  amounts  are  first  written,  and  then  the  Li&bility  Titles,  explanations,  and  amounts. 
The  money  columns  are  then  footed  and  ruled. 

O  Copy  the  above  and  submit  your  work  for  examination  and  approval. 


96  BUSINESS  PRACTICE  BOOKKEEPING 

GUIDE    NO.   9,     SET    IX.     Single  Entry  Improved 

PART    FIRST— Hardware  Business  Continued 

Note — Unless  you  are  sure  that  you  have  a  clear  knowledge  of  the  books  of  this  Set,  how  to  summar- 
ize, and  how  to  post,  do  not  try  to  do  the  business  until  you  again  review  the  discussions.  Nothing  but  ac- 
curate work  will  receive  your  teacher's  O.K. 

O  1-     Open  your  Journal  with   an  absolutely  correct  statement  of  all  your  Resources  and 

Liabilities .     Check  it  up  and  present  same  to  your  teacher  for  inspection. 
O  2.     Order  by  letter,  enclosing  order  sheet,  a  large  bill  of  hardware,  5  cards  each  of  10 

When  goods  arrive,  pay  freight  in  cash. 

Sell  to  some  student  6  cards,  3  kinds  of   Mdse.    for  cash.      O.   B.     Buy  on   same 
/.  B. 

Suy  of  some  student  Mdse.  on  acct.  60  ds.     /.  B.     Sell  on  same  terms.      O.  B . 

Pay  some  one  on  acct.  $200.      Collect  ditto. 

Telegraph  for  Y^  dozen  Food  Choppers  to  be  sent  C.  O.  D. 

Ship  Com'l  Exchange  $300  worth  of  goods  by  express,  C.  O.  D. 

Suy  Bank  Stock,  for  cash.     Pay  premium.     Collect  dividend  on  old  Bank  Stock. 

Write  advertisement  for  paper  to  fill  %  page,  not  less  than  200  words.     Pay  for  one 
\  insertion,  $12.50. 

Sell  8  cards,  4  kinds,  on  acct.  30  ds.     Buy  on  same  terms. 

Buy  for  note  at  60  ds,  with  int.  at  7  % .     Sell  on  same  terms. 

Sell  4  cards,  2  kinds,  of  hardware  for  cash.     Buy  on  same  terms. 

Buy  Mdse.,  %  cash,  bal.  on  acct.  30  ds.     Sell  on  same  terms. 

Sell  3  cards,  3  kinds,  driver  to  collect  on  delivery.     Btiy  on  same  terms. 

Give  your  note  in  settlement  of  some  account.     Receive  note  on  same  terms. 

Sell  your  Officer  Safe  for  $200;  %  cash,  balance  on  acct. 

BuyQooX  for  home  use,  $15,  and  pay  for  sanie  out  of  store  funds. 

Sell  to  Com'l  Exchange   Mdse.  bo't  of  floor  students;-  receive  cash   $500,    bal.  on 
acct.  60  ds. 
O         19.     Pay  three  creditors  on  account  $100,  $200,  and  $300,  respectively.      Collect  ditto. 
O  20.     You  may  now  Summarize  from  the  Invoice  Book,  Order  Book,  and    Cash   Book  to 

the  Journal,  then  post  from  the  Journal  to  the  Ledger. 

Cash  your  check  at  bank  for  $100;  take  $50  for  private  use  and  $50  for  office. 

Rent  to  teacher  desk  room  at  $10  per  month.     Collect  one  month's  rent,  $10. 

Credit  one  of  your  customers  with  $20  for  favors  received.     Notify  him. 

Sell  6  cards,  2  kinds,  of  hardware  on  acct.  30  ds.     Buy  on  same  terms. 

Draw  a  draft  on  Com'l  Exchange  for  $250  and  remit  it  to  Wholesaler  on  acct. 
'Present  your  work  to  teacher  for  inspection. 

Order  Mdse.  and  keep  a  good  supply  on  hand. 

Sell  3  kinds  of  hardware  for  cash.     Btcy  on  same  terms. 

Buy  4  kinds  of  Mdse.  on  acct.  30  ds.     Sell  ditto. 

Sell  2  kinds,  3  cards  each,    Mdse.;  part  cash,    part  draft  on  Com'l  Exchange,  and 

:ct.  60  ds. 

Buy  3  kinds  of  Mdse.  subject  to  sight  draft.     Sell  on  same  terms. 

Pay  all  notes  and  interest  as  they  come  due. 

Collect  on  notes  due  with  interest. 

Buy  4  kinds  of  Mdse.  on  acct.  30  ds.     Sell  ditto. 

Sell  Com'l  Exchange  on  acct.  60  ds.,  goods  bo't  of  floor  students. 

Pay  some  student  $210  on  account.     Collect  ditto. 

Buy  Office  Safe  on  acct.  30  ds.,  $225. 

Exchange  Typewriter  and  Desk  for  new.     Pay  difference  of  $40  in  cash. 


kinds. 

o 

3. 

terms. 

o 

4. 

o 

5. 

o 

6. 

o 

7. 

o 

8. 

o 

9. 

month's 

o 

10. 

o 

11. 

o 

12. 

o 

13. 

o 

14. 

o 

15. 

o 

16. 

o 

17. 

o 

18. 

O 

21. 

O 

22. 

O 

23. 

o 

24. 

o 

25. 

^•*Pr 

o 

26. 

o 

27. 

o 

28. 

o 

29. 

bal 

,  on 

O 

30. 

o 

31. 

o 

32. 

o 

33. 

o 

34. 

o 

35. 

o 

36. 

o 

37. 

BUSINESS  PRACTICE  BOOKKEEPING  97 

O         38.     Sell  a  small  bill  of  hardware  on  acct.  30  ds.     Buy  on  same  terms. 

O         39.     Buy  Mdse.,  V2  cash,,  bal.  on  acct.  60  ds.     Sell  ditto. 

O  40.  Siunmarize  as  before  and  post.  Prove  Cash  and  proceed  to  make  the  following 
changes: 

PART    S:eCOND 

Note — For  the  remainder  of  this  Set,  you  may  post  directly  from  the  Cash  Book,  In'voice  Book,  Order 
'Book,  and  journal  without  Summarizing. 

O  41.  You  will  now  forward  your  Cash  Balance  to  the  double-page  Cash  'Book,  and  enter  it 
on  the  debit  side  as  Cash  on  hand. 

Note — In  the  first  or  left  hand  column  on  each  page  are  entered  cash  reczvved  or  cash  pa.id  on  account,  as 
such  items  are  readily  distinguished  in  posting.  In  the  other  columns  are  entered  all  other  cash  items  and 
also  the  footings  of  the  account  columns. 

Order  Mdse.  by  letter.     Get  teacher's  O.K. 

Sell  4  cards,  2  kinds,  of  hardware  for  cash.     Buy  on  same  terms. 

Buy  Mdse.  on  acct.  60  ds.     Sell  on  same  terms. 

Sell  6  cards,  3  kinds  of  goods,  on  acct.  30  ds.     Buy  on  same  terms. 

Buy  a  bill  of  Mdse.,  pay  part  cash,  balance  on  acct.  30  ds.     Sell  on  same  terms. 

Remit  wholesaler  by  bank  draft  for  about  one-half  the  amount  due  him.  Enclose 
with  letter  and  state  that  you  will  soon  remit  balance  due. 

Sell  8  cards  of  hardware  for  note  at  90  ds.  with  interest  at  6  %. 

Discount  the  above  note  at  bank. 

Settle  two  accounts  by  giving  and  receiving  notes  payable  at  bank. 

Buy  Mdse.  on  acct.  30  ds.     Sell  on  same  terms. 

Sell  3  kinds  of  goods  subject  to  draft  at  30  ds.     Buy  on  same  terms. 

Sell  a  bill  of  Mdse.  bo't  of  floor  students  to  the  Com'l  Exchange  on  acct.  60  ds. 

Draw  a  draft  on  Com'l  Exchange  for  $500  and  send  it  to  a  wholesaler  on  account. 

Accept  a  30  day  draft  from  some  creditor  in  favor  of  himself  or  some  other  student. 

Leave  note  at  bank  for  collection.  Get  a  check  certified.  Sell  Bank  Stock  at  a 
premium. 

O         57.     Sell  some  student  a  bill  of  6  cards  for  cash.     Buy  on  same  terms. 

O  58.  JPay  aW  accounts  due,  including  bookkeeper's  salary,  $20;  insurance,  $30;  and  inter- 
est on  notes  not  yet  due. 

O         59.      Collect  all  accounts  due.     Require  settlement  by  cash  or  note. 

O  60.  Foot,  rule,  and  balance  Cash  Book.  Carry  footings  of  the  Accounts  columns  to  the 
ge?ieral  columns  before  ruling. 

Post  directly  from  the  Order  Book,  Invoice  Book,  Journal,  and  Cash  Book  to  the 
Ledger. 

Check  every  item  by  page  number. 

Make  out  Final  Statement  showing  ih^  Resources,  Liabilities,  Present  Worth,  and  Loss 
or  Gain,  and  carry  the  loss  or  gain  to  the  Proprietor' s  Account.  Present  your  books  for  in- 
spection and  record. 


0 

42. 

0 

43. 

0 

44. 

0 

45. 

0 

46. 

0 

47. 

with  let 

0 

48. 

0 

49. 

0 

50. 

0 

51. 

0 

52. 

0 

53. 

0 

54. 

0 

55. 

0 

56. 

DOUBLE  ENTRY 


SET    X. 


Actual .  Business   Practice 

358.  Its  Purpose:  The  purpose  of  this  Set  is  to  give  the  student  a  broader  view  of 
Double  Entry  bookkeeping-  and  introduces  the  following: 

1.  Changing  from  Single  Entry  to  Double  Entry. 

2.  Opening  a  full  set  of  Double  Entry  books. 

3.  Debiting  or  Crediting  accrued  Interest  on   Notes  Receivable  and  Notes  Paya- 
ble, Accounts  Receivable  and  Accounts  Payable  in  the  Opening  Statement. 

4.  Introduction  of  special  columns  in  some  of  the  books. 

5.  Special  treatment  of  C.  O.  D.,  Consignment,  and  Shipment  accounts. 

6.  Establishing  a  Branch  House  and  instructing  its  manager  in  regard  to  manner 
of  conducting  the  business. 

7.  The  taking  of  Daily  Balances. 

8.  Averaging  Accounts  Current. 

9.  Settling  with  customers  who  have  failed  and  can  pay  only  80  cents   on    the 
dollar. 

10.     Closing  out  business. 

359.  Books  Used:  The  books  of  this  Set  are  those  which  constitute  a  full  double  entry 
set  and  consist  of  the  following:  Journal,  Cash  Book,  Invoice  Book,  Sales  Book,  and  Ledger,  to- 
gether with  the  regular  bank  account  books  and  books  for  memorandum  only. 

360.  In  changing  the  books  from  Single  to  Double  Entry,  accounts  are  opened  in  the 
Ledger  with  all  Persons,  Property,  or  Allowances,  as  shown  in  the  closing  statement  of  Single 
Entry  and  which  should  appear  in  the  opening  entry  of  the  Journal. 

361.  Accrued  Interest  on  all  Notes  and  Accounts  should  appear  in  the  opening  state- 
ment as  Interest  and  Discount  hiventory ,^ ^  and  will  increase  or  decrease  the  Present  Worth 
accordingly. 

362.  Special  C.  O.  D.,  Consignment,  and  Shipment  accounts  are  debited  or  credited  the 
same  as  Personal  accounts. 

363.  Branch.  House:  Full  instructions  are  to  be  given  by  the  student  to  the  manager 
of  his  Branch  House  in  regard  to  the  business  generally,  and  to  the  Special  Column  Journal  book- 
keeping in  particular,  together  with  the  statements  at  the  opening  and  closing  of  the  Branch 
House. 

'  364.     Daily  Balances  are  required  and  also  the  testing  of  Cash  daily. 

365.     Read  your  Guide  carefully  and  intelligently  and  follow  it  to  the  letter. 


100  BUSINESS    PRACTICE  BOOKKEEPING 

GUIDE    NO.     10,     SBT    X.     Double  Entry 

GENl^RAI,    MERCHANDIS:E 

Note — The  student  will  note  that  this  Set  is  divided  into  "  Day's  Work."  At  the  close  of  each  day  a 
"  Daily  Statement"  must  be  made  out  and  the  cash  tested.  It  is  not  necessary  to  rule  the  Cash  Book  except 
at  the  close  of  the  fifth  and  tenth  days,  when  the  Cash  should  be  proved  and  the  bank  account  reconciled. 

MONDAY 

O  1-     First  Day — Open  your  books,  Journal,  Cash  Book,  and  Ledger  complete,  and  have 

same  O.  K'd. 
O  2.     ^liy  Office  Desk,  Safe,  lyCtter  File  Cabinet,  and  Typewriter  and  Desk  for  cash. 

O  3.     Order  a  large  stock  of  not  less  than  $5000  worth  of  general  merchandise  to  be  sent 

by  freight. 
O  4.     Insure  the  same,  paying  1  %  premium  in  cash. 

O  5.     Buy  Real  Estate;  pay  $1000  cash  and  give  your  note  with  interest  at  6  %  for  90  ds. 

secured  by  mortgage  for  $1000. 

Note — Make  out  both  deed  and  mortgage.  Seller  will  sign  the  deed  and  the  buyer  will  sign  the  mort. 
gage.     Have  both  acknowledged  and  recorded.     Get  O.  K, 

O  6.  I/ease  desk  room  to  some  one  at  a  rental  of  $15  per  month.     Give  Lease. 

O  7.  Receive  goods,  pay  freight,  and  check  off  same. 

O  8.  Sell  $500  worth  of  Mdse.,  8  kinds,  to  some  student  on  acct.   30  ds.     Buy  on  same 

terms. 

O  9.  Remit  wholesaler  $1000  on  account  by  bank  draft. 

O         10.  Post,  prove  your  cash,  make  daily  statement,  and  have  same  O.  K'd. 

TUESDAY 

O         11-     Second  Day — Notify  by  letter  the  commission  house  that  you  will  be  glad  to  handle 
any  shipments  they  may  send  you.     Submit  letter  for  approval. 

Sell  3  kinds  of  Mdse.  on  acct.  60  ds.     Buy  on  same  terms. 

Order  by  telegram  one  National  Cash  Register  to  be  sent  C.  O.  D. 

Buy  on  acct.  60  ds.  Show  Cases  for  store,  $500. 

Sell  4  kinds  of  Mdse.  on  acct.  90  ds.     ^uj/  on  same  terms. 

Buy  6  cards  of  Mdse.,  3  kinds  or  more,  for  cash.     Se//  on  same  terms. 

Sell  8  cards,  3  kinds  or  more,  for  part  cash  and  bal.  on  acct.  30  ds.     &ii_y  on  same 

Give  Wholesaler,  on  account,  your  note  for  $500,  with  interest  at  6  %  for  60  ds. 

Receive  a  note  on  account  from  some  one  who  owes  you. 

Postf  prove  cash,  and  render  a  daily  statement.     Have  same  O.  K'd. 

w:edn:rsday 

O         21.     Third    Day — Sell  some  student  on  acct.  60  ds.  a  small  bill  of  goods.     Buy  on 

same  terms. 
O         22.     Sell  to  Com'l  Exchange  a  bill  of  Mdse.  bo't  of  floor  students  on  acct.  60  ds. 
O         23.     Sell  to  some  student  on  his  note  at  90  ds,  with  interest,  6  cards  of  Mdse.     Buy  on 

same  terms. 
O         24.     Pay  cash  on  some  note  not  yet  due.     Have  same  endorsed  properly  on  note. 
O         25.     Receive  cash  on  note  held  by  you.     Make  proper  endorsement. 
O         26.      Collect  cash  of  Com'l  Exchange.     Also  pay  cash  on  account  to  some  one  whom 

you  owe. 
O         27.     Draw  on  Com'l  Exchange  in  favor  of  Wholesaler  for  $500  payable  at  sight. 
O         28.     Sell  6  cards  of  Mdse.  for  part  cash  and  part  note  at  30  ds.  with  int.  at  7  %.     ^uy 

on  same  terms. 


o 

12. 

o 

13. 

o 

14. 

o 

15. 

o 

16. 

o 

17. 

terms. 

o 

18. 

o 

19. 

o 

20. 

BUSINESS    PRACTICE    BOOKKEEPING  101 

O         29.     J5ny  Coal  for  ofl&ce  for  cash,  $30.     Sell  part  of  it  to  some  student  for  cash,  $15. 
O         30.     Post,  prove  cash,  render  daily  statement,  and  get  O.  K. 

THURSDAY 

O  31.  Fourth  Day — Buy  Bank,  Insurance,  and  Railway  Stocks,  paying  premium  if 
necessary. 

O         32.     Suy  on  acct.  30  ds.  one  Burroughs  Adding  Machine,  $450. 

O         33.     Sells  cards  Mdse.  on  acct.  60  ds.     Buy  on  same  terms. 

O  34.  Buy  4  different  kinds  of  Mdse.  Pay  $200  cash,  bal.  on  acct.  30  ds.  Sell  on  same 
terms. 

O  35.  Sell  3  different  kinds  of  Mdse.  for  cash  and  draft  on  Com'l  Exchange.  Buj  on 
same  terms. 

O  36.  I/eave  all  notes  at  60  ds.  at  bank  for  collection.  Sell  all  your  90  day  notes  to  bank, 
and  collect  all  short  time  notes,  30  ds.  or  less,  yourself. 

O         37.     Pay  two  bills  not  yet  due;  ask  discount.     Collect  ditto,  and  give  discount. 

O  38.  Send  two  telegrams  for  goods,  one  C.  O.  D.,  the  other  on  acct.  30  ds.  Get  tele- 
grams O.  K'd. 

O  39.  Make  a  cash  payment  on  your  Real  Estate  note,  $500.  Order  a  large  bill  of  Mdse. 
from  wholesaler  by  letter. 

O         40.     Post,  prove  cash,  and  render  daily    statement.     Get  O.  K. 

FRIDAY 

O  41.  Fifth  Day — Establish  a  branch  house  and  stock  it  up.  Give  full  instructions  to 
your  branch  house  manager  as  regards  the  books  of  accounting  and  the  methods  of  procedure 
generally.     Render  him  a  statement  of  all  assets  and  liabilities  turned  over  to  the  branch  house. 

Note— Give  the  B.  H.  Cash,  Mdse.,  Notes  Rec,  Accts.  Rec.  and  Accts.  Pay.,  and  any  other  properties 
or  values  you  wish  for  its  Resources  and  Liabilities. 

O         42.     Advertise  in  paper  and  pay  for  same  in  cash,  $12.50. 

Note — Write  out   display  advertisement  to  occupy  20  inches  of  space  (4  columns  5  inches  long)  and 
present  to  teacher  for  inspection. 

O         43.     Receive  goods  ordered  in  39  and  pay  freight  in  cash.     Remit  $500  on  account  of 

same  by  bank  draft. 
O         44.     Sell  3  kinds  of  Mdse.  on  acct.  60  ds.     Buy  on  same  terms. 

Buy  5  kinds  of  Mdse.,  V2  cash  balance  on  acct.  60  ds.     Sell  on  same  terms. 

Sell  4  kinds  of  Mdse.  for  note  and  cash.     Buy  on  same  terms. 

Buy  3  kinds  of  Mdse.  for  cash,  draft,  and  bal.  on  acct.  30  ds.     Sell  on  same  terms. 

Pay  and  collect  on  all  bills  due  either  by  cash  or  note. 

Discount  all  notes  at  60  ds.  or  over  at  bank. 

Post,  prove  cash,  make  out  daily  statement.  Make  up  your  Trial  Balance  from  your 
opening  entry  and  daily  statements.  Make  out  Balance  Sheet  and  close  the  Ledger.  Present 
books  for  O.  K. 


0 

45. 

0 

46. 

0 

47. 

0 

48. 

0 

.   49. 

0 

50. 

/ 


o 

53. 

o 

54. 

o 

55. 

o 

56. 

o 

57. 

102  BUSINESS  PRACTICE  BOOKEEPING 


SBCOND     WBBK 

MONDAY 

Note — The  student  will  note  several  duties  to  perform  that  are  not  mentioned  in  the  Guides;  such  as 
paying  and  collecting  interest  on  notes,  collecting  on  accounts  as  they  fall  due,  collecting  dividends  on  stocks, 
rendering  account  sales,  depositing  cash  in  bank,  selling  to  Com'l  Exchange  goods  bo't  of  floor  students, 
auditing  reports  from  Branch  House,  serving  as  director  in  banks  and  corporations,  etc.  These  duties  the 
student  will  perform  without  specific  instructions. 

O  51.  Sixth  Day — Write  a  display  advertisement  giving  notice  of  a  "Special  Sale"  for 
Thursday.  Quote  prices  at  20  %  off  on  twenty  different  articles.  Prepare  copy  and  get  O.  K. 
Post  conspicuously. 

O  52.  Receive  goods  previously  ordered,  pay  freight,  check  off,  and  return  several  cards 
not  up  to  sample.     Ask  for  memorandum  of  credit. 

Sell  3  kinds  of  Mdse.  for  cash.     Buy  on  same  terms. 

Buy  4  kinds  of  Mdse.  on  acct.  30  ds.     Se//  on  same  terms. 

Sell  5  kinds  of  Mdse.  part  cash,  bal.  on  acct.     Bjiy  on  same  terms. 

Suy  3  kinds  of  Mdse.  subject  to  draft  at  30  ds.  sight.     Se//  on  same  terms. 

Remit  to  three  wholesalers  by  bank  drafts  on  Chicago,  New  York,  and  San 
Francisco. 

O         58.     Sell  Mdse.  at  10,  and  5  %  off.     Bity  on  same  terms. 

O         59.     Remit  by  P.  O.  money  order.     Pay  and  collect  on  notes,  drafts,  and  account. 

O         60.     Post,  prove  cash,  and  make  out  daily  statement.     Get  O.  K. 


TU:eSDAY 

O         61,     SevE^NTH  Day — Render  S/a/emen/s   to  all   with   whom   you   have  accounts.     Get 
teacher's  O.  K.  on  these  before  sending  them  out. 

O        62.     Settle  with  some  student  for  80  cents  on  the  dollar.     Charge  to  Loss  and  Gain. 

O         63.     Pay  your  teacher  $25  for  assistance,  and  collect  $15  for  desk  room  rent.     Also  sur- 
render your  card  of  Coal.     Pay  printing  bill,  $3.50;  advertisement  $12.50;  stationery  bill,  $10. 

O         64.     Sell  three  bills  of  Mdse.     One  for  cash,  one  on  acct;   30  ds.,  and  one  for  cash  and 
acct.     Buy  ditto. 

O         65.     Sell  two  bills  of  Mdse.     One  for  cash,  note,  and  draft  on  Wholesaler,  and  one  sub- 
ject to  sight  draft.     Buy  on  same  terms, 
O         66.     Make  a  partial  payment  on  three  outstanding  notes,  in  cash, 

O         67.     I/eave  a  note  at  bank  for  collection;  get  a  receipt.     Discount  another  at  bank,  and 
receive  credit  in  Pass  Book. 

O         68.      W^rite  a  Letter  of  Recommendation  for  the  best  student  bookkeeper  in  yoiur  class. 
Hand  in  for  record. 

O         69.     Sell  three  bills  of  Mdse.  on  account.     Buy  on  same  terms. 

O         70.     Post,  prove  cash,  and  make  out  daily  statement.     Get  O.  K. 


w:eDN:eSDAY 

O         71.     Eighth  Day — Sell  three  bills  of  Mdse.  on  any  terms  that  will  accommodate  your 
neighbor.     Buy  ditto. 

O         72.     Draw  on  three  of  your  customers,  one  "at  sight,"  one  at  "30  days  sight,"  and  one 
at  "60  days  sight." 

O         73.     Accept  time  drafts  drawn  on  you,  and  pay  all  sight  drafts  in  cash. 


Note — The  student  will  see  that  drafts  are  drawn  on  him  so  that  he  can  pay  or  "accept  "  them. 


BUSINESS    PRACTICE    BOOKKEEPING  103 

O         74.     Prepay  some  note  or  draft  not  yet  due,  asking  discount.     Collect  ditto. 

O         75.     Telegraph  wholesalers  that  you  are  about  to  close  out  your  business  and  ask  them  to 

render  you  statements  of  account. 
O         76.     Sell  your  Real  Estate  for  cash.     Pay  off  your  mortgage  and  give  deed  with  clear 

title.     Furnish  Abstract.     Get  papers  O.  K'd. 
O         77.     Sell  two  or  three  bills  of  Mdse.  on  terms  to  suit  customers.     Buy  ditto. 
O         78.      Sell  to  Com'l  Exchange  all  consignments  on  hand  and   render  Account  Sales  for 

same.     Ask  for  reports  of  all  shipments  made  "  On  Sale." 
O         79.      Collect  and  Pay  on  accounts  due. 
O         80.     Post,  prove  cash,  and  make  out  daily  statement.     Get  O.  K. 

THURSDAY 

O  81.  Ninth  Day — *Se/i  first  five  bills  today  at  20  %  off  list  prices  per  advertisement  of 
last  Monday.     Buy  to  accommodate  others. 

O         82.      Collect  dividends  on  Stocks  and  sell  Stocks  at  premium.     Bity  Stocks. 

O         83.      Collect  cash,  $1000,  of  Com'l  Exchange,  crediting  them  with  $1100  as  bill  prepaid. 

Pay  Wholesaler  cash,  ask  discount. 

O         84.      Ship  a  bill  of  goods  to  Com.  Merchant  "on  sale."     Ask  an  advance  of  $100  cash. 

O         85.     Receive  a  bill  of  goods  of  Com.  Merchant  "on  sale."     Advance  $100  on  same. 

O  86.  Render  an  averaged  account  to  the  Com'l  Exchange,  showing  balance  due  with  in- 
terest or  discount,  as  the  case  may  be. 

O         87.     Sell  three  bills  on  terms  agreeable  to  customers.     Buy  ditto. 

O         88.     Write  a  letter  of  introduction  for  a  friend.     Present  same  for  inspection  and  record. 

O  89.  Ask  for  statements  from  all  persons  with  whom  you  have  open  accounts.  Compare 
same  with  your  Ledger. 

O         90.     Postf  prove  cash,  make  out  daily  statement,  and  get  O.  K. 

FRIDAY 

Note — This  being  the  last  day  of  this  Set,  you  will  have  many  side  duties  to  perform.  Settlements 
must  be  made,  accounts  verified,  inventories  taken,  and  all  matters  straightened  to  close  out  the  business. 
See  that  all  vouchers  and  papers  are  in  their  proper  places  and  have  your  desk  in  perfect  order.  Your  promo- 
tion to  the  wholesale  department  will  be  made  only  on  a  satisfactory  showing  in  this  Set. 

O         91.     Tenth  Day — Sell  to  students  all  your  Mdse.   bo't  of  wholesalers  in  bills  not  ex- 
ceeding $500,  giving  a  special  discount  of  5  %. 
O         92.     Sell  for  cash  to  Com'l  Exchange  all  Mdse.  bo't  of  floor  students. 
O         93.     Sell  for  cash  at  10   %  discount  all  of  your  Furniture  and  Fixtures,   Chattels,  etc., 

except  your  stocks  and  bonds,  which  you  will  retain. 
O         94.     Pay  all  notes  payable  and  acceptances,  also  interest  on  same  in  cash. 
Collect  on  all  notes  and  drafts  receivable,  with  interest  due. 
Pay  clerk's  salary,  $25;  electricity  and  gas  bill,  $7.25. 

Verify  your  Notes  Receivable  and  Notes  Payable  accounts.     They  should  balance. 
Post.      Examine  your  Ledger  for  unsettled  personal  accounts.     If  there  are  any, 
require  settlement  at  once. 
O         99.     Prove  Cash,  reconcile  your  bank  account,  and  make  out  daily  statement. 
O       100.     Take  a  Trial  Balance  horn  your  daily  statements.     Make  out   Balance   Sheet,    and 
Close  the  Ledger.     Present  your  books  for  inspection  and  record. 


o 

95 

o 

96 

o 

97 

o 

98 

t04  BUSINESS    PRACTICE    BOOKKEEPING 

Questions  for  Review 

1.  Describe  the  Cash  Book,  the  number  and  uses  of  each  column. 

2.  How  are  postings  made  of  Mdse.?  of  Sundries  accounts. 

3.  What  is  meant  by  "  Ledger  Titles"'  in  the  Cash  Book? 

4.  How  is  Cash  ''proved,'"  and  how  is  the  Cash  Book  balanced  ? 

5.  What  are  the  principle  features  of  Set  IV? 

6.  Describe  in  full  the  process  and  Journal  entry  in  "selling  out." 

7.  Describe  the  Sales  Book,  the  number  and  uses  of  each  column. 

8.  Describe  posting,  paging,  and  checking  of  the  Sales  Book. 

9.  Describe  the   Invoice  Book.     What   advantages  has  it  over  the  Journal   for  reccru- 
ing  purchases  ? 

10.  Describe  posting,  paging,  numbering  of  invoices,  and  checking  in  the  Invoice    Book. 

11.  What  are  the  purposes  of  Set  V  ? 

12.  What  are  the  principal  points  embodied  in  an  Articles  of  Copartnership  contract? 

13.  Describe  an  Account  Sales.     An  Account  Purchase. 

14.  What  are  the  principal  features  of  Set  VI  ? 

15.  Describe  the  manner  of  selling  or  buying  an  interest  in  a  business  without  taking 
a  balance  sheet. 

16.  Describe  the  Special  Column  Journal. 

17.  What  are  its  advantages? 

18.  How  are  postings  made  from  the  S.  C.  J.?- 

19.  What  is  a  Statement  of  Account?     When  should  they  be  rendered? 

20.  Describe  the  Credit  Memorandum  and  define  its  purpose. 

21.  What  is  a  Branch  House?     A  Principal  or  Main  House? 

22.  What  are  the  principal  features  of  Set  VII  ? 

23.  What  constitutes  an  "authentic  signature  "  of  the  Branch  House? 

24.  Describe  the  correct  method  of  closing  up  a  branch  house  business. 

25.  How  does  Single  Entry  Bookkeeping  differ  from  Double  Entry  ? 

26.  Describe  the  Single  Entry  Journal. 

27.  How  are  the  debits  distinguished  from  the  credits? 

28.  What  lycdger  accounts  are  kept  in  Single  Entry  ? 

29.  Describe  the  Single  Entry  Cash  Book. 

30.  How  is  the  lyoss  or  Gain  found  ? 

31.  What  are  the  special  features  of  Set  VIII? 

32.  Explain  the  additional  features  introduced  in  Advanced  Single  Entry. 

33.  What  is  meant  by  summajizing  and  from  what  books  are  summaries  made? 

34.  What  important  change  in  manner  of  posting  is  made  in  part  second  of  Set  IX  ? 

35.  How  are  books  changed  from  Single  to  Double  Entry  ? 

36.  What  are  the  essential  features  presented  in  Set  X  ? 

37.  What  is  the  purpose  of  a  "  daily  balance,"  and  how  is  it  taken? 

38.  What  entry  is  necessary  in  starting  a  branch  house? 

39.  What  entry  is  necessary  in  receiving  the  final  report  when  a  branch  house  closes  up 
its  business? 

40.  Which  system  of  bookkeeping  do  you  prefer;   Single  or  Double  Entry?     State  your 
reasons. 


HIGHER    ACCOUNTING 

Bmbracing : 

1.  Wholesale  Accounting 

2.  Commission 

3.  Banking 

4.  Corporation  Accounting 


HIGHER  ACCOUNTING 

INTRODUCTION 

The  Department  of  Higher  Accounting  in  this  work  is  intended  to  give  students  a  broader 
knowledge  of  the  science  of  accounts,  and  to  acquaint  them  with  the  more  modern  methods  of 
accounting  as  now  practiced  in  leading  wholesale  and  commission  houses,  banks,  and  corpora- 
tions. 

366.  T'he  use  of  special  columns  in  nearly  all  the  books  of  account,  the  duplication  of 
orders,  bills,  invoices,  etc.,  and  the  classification  of  accounts  are  clearly  discussed  and  illustrated. 

367.  Modern  accounting  requires  more  than  an  accurate  record  of  the  debits  and 
credits  of  the  concern.  A  business  manager  must  be  able  to  ascertain  from  the  books  a  knowl- 
edge that  will  assist  him  very  materially  in  the  better  management  of  the  business. 

368.  ^he  Student  should  at  all  times  strive  to  perfect  himself  in  the  management  of 
the  business  which  he  is  conducting.  Skill  can  be  developed  only  by  degrees,  and  by  constant 
and  careful  study  and  practice. 

369.  The  Subjects  discussed  and  illustrated  herewith  embrace  the  following: 

1.  Wholesale  Accounting  as  exemplified  in  the  modern  business  office. 

2.  Commission  Accounting  as  practiced  in  the  best  commission  houses. 

3.  Bank  Bookkeepings  illustrating  the  methods  endorsed  and  practiced  by  leading 
bank  accountants. 

4.  Real  Estate  and  Insurance  Accounts,  Records,  and  Transfers. 

5.  Corporation  Accounting ,  including  the  organization,  election  of  officers,  the 
issuing  and  transfer  of  stocks  and  bonds,  the  payment  of  dividends,  the  levying  of  assess- 
ments, etc. 

370.  T/zJS  Department  should  be  equipped  with  counting-house  offices  and  desks  as 
neat  and  businesslike  as  can  be  afforded  by  the  management.  It  is  not  necessary  that  they  be 
costly  so  long  as  they  are  attractive  and  practical. 

371.  The  Offices  Necessary  in  a  school  of  twenty-five  students  or  less  are  a  Commercial 
Exchange,  one  Bank,  a  Freight,  Express,  and  Post  Office,  and  one  or  more  Wholesale  and  Com- 
mission Offices.  In  a  school  of  fifty,  another  bank  should  be  added  and  more  wholesale  and 
commission  offices.  In  very  large  classes  it  will  be  necessary  to  increase  the  office  facilities  in 
proportion  to  the  number  to  be  accommodated. 

372.  The  Commercial  Exchange  takes  the  place  of  the  ma^mfacttirer.  From  it  the 
wholesaler  purchases  most  of  his  supplies.  It  also  takes  the  place  of  the  consumer,  as  it  buys 
from  the  retailer  the  goods  purchased  from  "'floor  students.'''  It  also  transacts  a  miscellaneous 
business  with  all  the  students  and  is  a  sort  of  depot  for  general  supplies. 

373.  The  Banks  receive  deposits,  negotiate  loans,  cash  checks,  sell  drafts  on  other  banks, 
make  collections,  and  do  a  general  banking  business. 

374.  The  F'reight,  Sxpress,  and  Post  Office  perform  the  duties  that  generally  obtain 
in  such  offices.     In  small  schools,  one  office  for  all  three  is  sufficient. 

375.  The  Wholesale  and  Commission  offices  are  for  the  advanced  students,  and 
should  receive  considerable  attention  as  regards  equipment  and  facilities.  These  offices  can  be 
made  very  attractive  with  but  little  expense.  A  few  dollars  invested  here  will  bring  profitable 
returns. 

376.  An  Emporium,  oerforming  all  the  functions  of  a  Cofnmercial  Exchange,  may  be  es- 
tablished in  very  large  schools  with  gratifying  results.  Both  Commercial  Exchange  and  Empor- 
ium may  be  conducted  by  students  instead  of  the  regular  wholesale  office,  the  system  of  book- 
keeping in  both  being  precisely  the  same. 

377.  The  Incorporation  of  the  Banks,  Insurance,  Railway,  and  Express  companies  will 
give  ample  field  for  the  illustration  of  corporation  accounting.  While  many  schools  will  not  care 
to  include  this  feature,  it  may  be  made  very  interesting  and  instructive  by  a  little  additional 
work  on  the  part  of  students  and  teachers. 


The    Wholesale    Office 


TO    THE    STUDENT 

378.  There  are  certain  qualifications  necessary  to  every  business  man  and  to  every  efficient 
accountant.     These  are  ►Sy^/^;^,  Order,  Neatness,  Dispatch,  hitegrity,  and  Adi/itj. 

379.  >Sysiem' consists  in  having  3^our  business  affairs  arranged  so  that  each  duty  may  have 
your  attention  in  its  logical  order. 

380.  Order  is  the  key  to  success  in  all  office  work.  Have  a  place  for  everything,  and  put 
everything  in  its  proper  place. 

381.  Dispatch  doubles  your  salary  and  gives  an  extra  holiday.  Business  men  pay  for 
qtiantity  as  well  as  for  the  quality  of  work  done. 

382.  Integrity  wins  the  confidence  of  friends,  establishes  credit,  and  earns  a  reputation 
which  is  far  more  valuable  than  mere  dollars. 

383.  Ability  takes  advantage  of  circumstances.  It  embraces  judgment,  skill,  education, 
experience,  and  energy,  and  with  system,  order,  neat7iess,  i?itegrity  and  dispatch,  makes  the  suc- 
cessful business  man. 

384.  In  the  Wholesale  Office  you  are  expected  to  demonstrate  your  ability  to  turn  out 
a  large  amount  of  work  with  skill,  accuracy,  and  dispatch. 

385.  Post  yourself  thoroughly  upon  the  methods  of  conducting  your  business,  the  system 
of  bookkeeping  herewith  presented,  and  the  routine  of  work  to  be  performed. 

386.  YoVL  must  keep  your  office  in  perfect  order  at  all  times,  and  be  able  to  refer  to  any 
book,  item,  or  account  at  a  moment's  notice.  You  must  give  particular  attention  to  W\q.  proper 
filijig  of  Invoices,  Bills,  Receipts,  Notes,  Drafts,  Checks,  Letters,  etc.  Make  it  a  part  of  your 
system. 

387.  Mxert  your  own  ingenuity  in  preparing  facilities  with  which  to  work.  Do  not  think 
that  you  must  be  told  everything.  Keep  your  pens  and  ink  in  good  working  condition.  Have 
a  good  calendar  handy  and  use  it  in  timing  notes,  bills,  and  statements. 

388.  Study  the  instructions  in  both  text  and  Guides  carefully,  and  perform  your  work  so 
skillfully  that  few  errors  will  be  charged  against  you.  Your  record  in  this  office  will  largely 
measure  your  true  worth  as  a  competent  accountant. 


108  BUSINESS    PRACTICE  BOOKKEEPING 


Wholesale   Accounting 


389.  Wholesale  Accounting  differs  materially  from  ordinary  retail  bookkeeping  in 
many  respects,  owing  to  the  nature  of  the  business,  to  the  quantity  of  goods  handled,  to  the 
system  of  credits,  to  the  terms  and  discounts  given  customers,  and  to  the  methods  of  rendering 
statements  and  making  collections. 

390.  In  Wholesale  Bookkeeping  it  is  necessary  to  have  a  complete  record  of  every 
transaction  in  its  fullest  detail,  together  with  proper  vouchers  so  systematically  filed  that  they 
can  be  referred  to  at  a  moment's  notice. 

391.  Proper  Classification  of  all  accounts  must  be  made  so  that  the  proprietors  may 
know  at  all  times  the  condition  of  the  business.  Without  this  knowledge  mistakes  of  manage- 
ment and  consequent  losses  are  likely  to  occur. 

392.  The  Records  of  Wholesale  Accounting  are  classified  as  follows: 

1.  ^he.  Purchasing  Vouchers  or  Invoices. 

2.  The  Selling  Vouchers,  Orders  and  Sales  Invoices. 

3.  The  Receipts,  Cash,  Notes,  and  credit  items. 

4.  The  Payments,  Cash,  Notes,  and  debit  items. 

5.  The  Purchase  Ledger. 

6.  The  Sales  Ledger 

7.  The  General  Ledger. 

8.  The  Banlc  Account. 

The  l/oose  I^eaf  System 

393.  Modern  Accounting  has  developed  a  system  of  loose  leaf  records  which  is  gener- 
ally accepted  as  the  best  and  most  satisfactory  of  all  methods  yet  devised.  This  system  consists 
of  binders  which  hold  original  or  duplicates  oi  all  order  sheets,  sale  invoices,  etc.,  arranged  in 
alphabetical  or  numerical  order. 

th:^  sai<bs  invoic:^   or  ord:br 

394.  Orders  for  Mdse.  are  received  in  three  ways: 

First — Orally,  either  by  personal  visit  or  by  telephone. 

Second — By  mail  or  telegram. 

Third — By  orders  taken  by  the  firm's  traveling  salesmen. 

395.  Upon  Receipt  of  an  order  by  any  of  the  above  methods,  it  is  entered  upon  a  regu- 
lar form  order  sheet,  pads  of  which  are  always  kept  at  hand,  and  is  then  given  to  the  ''Credif 
Man"  to  be  passed  upon.  If  the  buyer's  credit  is  good,  the  order  is  passed  to  the  clerks  having 
in  charge  the  billing,  checking,  assembling,  and  shipping  of  the  goods, 

396.  The  Order  Sheet  should  always  be  used,  and  at  least  one  duplicate  copy  taken. 
This  duplicate  should  be  sent  to  the  accounting  department  and  compared  with  the  original  after 
the  order  is  filled  and  final  checkings  made. 

397.  The  Order  Sheet  should  contain  the  following: 

1.  Names  and  Addresses  of  both  buyer  and  seller. 

2.  Both  Order  Number  and  Sale  Number. 

3.  Date  of  Order,  Terms,  How  Shipped,  and  Routing.  ^ 

4.  Date  Billed,  Date  Shipped,  Checked  by. 

5.  Items  of  the  Order,  including  quantity,  and  a  plainly  legible  description  of  the 
goods  wanted . 


BUSINESS    PRACTICE    BOOKKEEPING 
FORM    OF    ORDFR    AND    FXTFNSION    SH:eFT 


109 


398.  The  Stock  Clerk  upon  receipt  of  the  order,  selects  the  goods  called  for  in  the 
dorer,  checking  each  item  as  they  are  assembled.  He  then  passes  them  on  to  the  Shipping 
Clerk,  who  re-checks,  packs,  and  ships  the  goods,  thus  insuring  accuracy  by  a  double  checking 
system. 

399.  The  Billing  Clerk  next  receives  the  Order  Sheet,  makes  out  the  Customer's  Bill  or 
Sales  Invoice,  which  must  agree  with  the  completed  Order  Sheet.  Both  Bill  and  Order  Sheet  are 
then  passed  to  the  Bookkeeper,  who  files  the  order  in  a  loose  leaf  Sales  Binder  and  sends  the  Bill 
directly  to  the  customer. 

400.  Sales  Invoice  F'iles  or  Sales  Binders  are  of  many  different  makes  and  styles. 
Most  of  them  are  provided  with  expansion  covers  with  metal  posts  to  hold  the  order  sheets  in 
place.  Extension  Sheets  are  inserted  from  day  to  day  or  from  week  to  week  at  the  pleasure  of  the 
bookkeeper.  Upon  these  sheets  are  extended  the  total  of  each  sale  and  the  total  footings  for  the 
day  or  week. 

401.  Postings  are  made  directly  from  the  Order  Sheets  in  the  Sales  Binder  to  the  dedit  of 
the  customer's  account  in  the  Sales  Ledger,  Mdse.  being  credited  for  the  total  sales  in  the  Getieral 
Ledger.  Customer's  Accounts  are  sometimes  designated  by  numbers  in  order  to  facilitate  the 
labor  of  posting. 

THIS    PURCHASING    INVOIC]© 

402.  The  Purchasing  Invoice  is  the  Bill  or  Invoice  received  when  goods  are  bought. 
It  is  a  formal  statement  of  goods  purchased  and  usually  contains: 

1.  The  Names  and  addresses  of  both  buyer  and  seller. 

2.  The  I\'rms  of  the  sale,  discounts,  etc. 

3.  The  Sale  Number  2i\\<X  the  Buyer's  Invoice  Nicmber. 

4.  How  Shipped,  and  by  what  route. 

5.  Items,  quantity,  price,  extensions,  and  total  amount. 

403.  Upon  Receipt  of  an  Invoice  with  goods,  the  buyer  or  Receiving  Clerk  should  check 


110 


BUSINESS    PRACTICE    BOOKKEEPING 


off  each  item  carefully  to  see  that  no  shortage  occurs  and  to  note  that  the  goods  are  correct  and 
in  good  condition. 

404.     Bills  and  Invoices  are  numbered  and  placed  in  a  loose  leaf  Invoice  File  similar  to 
the  Sales  Binder  already  described,  and  postings  are  made  directly  from  it  to  the  Ledgers. 

FORM    OP    INVOICE    FII<]e    AND    EXTENSION    SHFFT 


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Note — For  furlher  discussion  of  Bills  and  Invoices  see  pages  14,  15,  and  16. 

405.  Post  directly  from  the  Invoices  to  the  credit  of  the  sellers'  accounts  in  the  Purchase 
Ledger,  and  debit  Mdse.  Account  in  the  Geyieral  Ledger  for  the  total  purchases. 

406.  Bills  for  other  items  than  Mdse.  are  not  extended  to  the  total  columns,  but  are 
posted  separately,  or  entered  in  Journal  or  Cash  Book  and  then  posted  to  their  proper  accounts. 

407.  When  a  Trial  Balance  is  taken,  the  total  of  the  Sa/es  Extensiofi  Sheets  are  posted 
to  the  debit  of  the  Accounts  Receivable  account,  and  the  totals  of  the  Purchase  Extension  Sheets 
are  posted  to  the  credit  of  the  Accotints  Payable  account  in  the  General  Ledger,  thus  maintaining 
the  balance  of  this  book. 

408.  Memorandums  of  Credit  given  by  the  firm  for  goods  returned  must  not  be 
treated  as  purchases,  but  the  total  amount  should  be  deducted  from  the  sales  and  proper  credit 
given  to  the  customer. 

409.  Memorandums  of  Credit  given  to  the  firm  for  goods  returned  to  seller  must  not 
be  treated  as  sales,  but  the  total  amount  should  be  deducted  from  the  piir chases  and  charged  to 
the  seller. 

410.  A  Debit  and  Credit  ''Returned  Goods''  book  or  file  similar  to  the  Sales  Invoice  file 
may  be  used,  and  postings  made  from  it  in  like  manner. 


BUSINESS    PRACTICE    BOOKKEEPING  111 

The  Wholesale  Journal 

411.  In  the  liVholesale  Journal  are  recorded  all  transactions  that  are  not  regularly- 
entered  in  the  Sa/es  Invoice  File,  Purchase  Invoice  File,  or  Cash  Book. 

412.  The  F'orin  of  the  Wholesale  Journal  is  immaterial  so  long  as  the  debits  and  the  cred- 
its are  plainly  distinguished.  The  form  illustrated  on  pages  19,  20,  and  21  is  a  popular  one  and 
already  familiar  to  the  student.  Some  bookkeepers  prefer  a  Special  Column  Journal  ruled  simi- 
lar to  the  one  on  page  78  with  debit  columns  for  Notes  Receivable,  Personal,  and  Sundries,  and 
credit  columns  for  Sundries,  Personal,  and  Notes  Payable,  in  the  order  mentioned. 

413.  The  J^ntries  most  frequently   appearing  in  the  Journal  are  as  follows: 

1.  Opening  erttries  at  the  beginning  of  business  and  upon  resuming  business  after 
closing  the  books. 

2.  Notes  received  or  given  on  Q.cconn\.. 

3.  Sundries  sales  or  purchases,   other  than  of  merchandise,  on  account,  especially 
when  no  bill  or  invoice  is  received. 

4.  Drafts  drawn  or  acceptances  given  on  account. 

5.  Sundries  credits  made  for  unpaid  salaries,  favors  receiv^ed,  etc. 

Note — When  goods  are  bought  or  services  received  by  the  firm  and  no  bill  rendered,  a  Memorandum 
BiU  should  be  made  out  and  placed  on  file  for  reference.  » 

414.  In  the  Journal  should  also  be  entered  a  summary  of  all  articles  of  co-partnership, 
including  salaries  of  partners,  the  division  of  losses  or  gains,  duties  of  partners,  etc.  In  it 
should  also  be  recorded  all  particulars  regarding  the  admission  or  retirement  of  partners,  terms 
of  buying  or  selling  an  interest  in  the  business,  and  a  complete  statement  of  the  assets  and  liabili- 
ties involved  in  the  sale  or  purchase. 

415.  "V^Q.  Journal  while  containing  comparatively  few  entries  is  a  very  important  book  and 
should  receive  careful  and  painstaking  attention. 


The  Wholesale  'Cash  Book 

416.  The  Wholesale  Cash  Book,  illustrated  on  the  following  pages  and  used  here, 
makes  use  of  eight  mo7iey  columns,  four  on  the  debit  and  four  on  the  credit  side  of  the  book.  It 
is  sometimes  called  the  Eight  Column  Cash  Book. 

417.  Besides  the  date,  checking,  title,  and  explanation coXxxmns  found  in  all  cash  books,  it 
has  on  Wx^  Debit  s\^e  money  columns  for  Mdse.,  Accounts  Receivable  including  both  Net  and 
Discount,  and  a  General  Column  for  Sundries  cash  receipts. 

418.  In  the  Mdse.  Column  are  entered  any  special  "spot  cash  sales"  made  during  the 
day,  also  the  total  petty  sales  taken  from  the  Cash  Register,  together  with  the  total  footings  of  the 
cash  column  on  the  Extension  Sheet  of  the  Sales  Invoice  File. 


112 


BUSINESS  PRACTICE  BOOKKEEPING 


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419.  In  the  Accounts  Receivable  Columns,  Net  and  Discount,  are  entered  the  actual 
•cash  received  on  account  and  the  discount  allowed. 

Note— -It  is  a  universal  practice  among  wholesalers  to  allow  a  certain  discount  for  the  payment  of  a  bill 
within  a  specified  time.  As  full  credit  must  be  given  to  offset  the  charge,  it  is  necessary  to  enter,  not  only 
the  net  cash  received,  but  also  the  discount  for  which  a  special  column  is  provided. 

420.  In  the  General  Column  is  entered  all  sundries  receipts  not  entered  in  the  special 
.columns  together  with  the  footings  of  the  special  columns.     In  this  column  is  also  entered  the 

Contra  Discount  which  is  transferred  from  the  credit  side  of  the  Cash  Book. 

421.  The  Money  Columns  on  the  credit  side  are  for  Expense,  Accounts  Payable  includ- 
ing Net  and  Discount,  and  a  Ge^ieral  column  for  sundries  cash  payments. 

422.  In  the  Expense  Column  are  entered  all  payments  to  be  charged  to  the  Expense 


BUSINESS  PRACTICE  BOOKKEEPING 


113 


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Accotint,  including  rent,  salaries  of  clerks  and  employes,  stationery,  etc. 

423.  In  the  Accounts  Payable  Columns,  Net  and  Discoiait,  are  entered  the  actual 
cash  paid  on  account  and  also  the  discount  allowed,  both  items  being  charged  to  the  creditor  to 
offset  his  credit  balance. 

424.  In  the  General  Column  are  entered  all  sundries  payments  not  entered  in  the 
special  columns  together  with  the  footings  of  the  special  columns.  In  this  column  is  also  entered 
the  Contra  Discount  which  is  transferred  from  the  debit  side  of  the  Cash  Book. 

425.  The  balance  of  the  Cash  Book  is  found  in  the  usual  manner,  written  in  red  ink, 
and  brought  down  as  Cash  on  hand  or  as  an  Overdraft.  Special  attention  should  be  given  to  the 
correct  red  ruling  of  this  book.     Study  the  model  carefully. 


114 


BUSINESS    PRACTICE    BOOKKEEPING 


THB    WHOI.BSAI,B    I.BDGBRS 

426.  In  the  Wholesale  Office  three  ledgers  are  to  be  used:  the  General  Ledger,  a  Pur- 
chase Ledger,  and  a  Sales  Ledger. 

427.  The  General  I/edger  contains  all  general  accomits;  such  as  Mdse. ,  Discoimt,  Furni- 
ture and  Fixtnres,  Chattels,  Notes  Receivable,  Notes  Payable,  hiterest  and  Discount,  Real  Estate, 
Stocks  and  Bonds,  Expense,  Collection  and  Exchange,  Insurance,  etc.,  together  with  the  Proprie- 
tors' Accounts,  both  private  and  proprietary.  It  also  contains  the  Accounts  Receivable  and  the 
Accou7its  Payable  accounts,  which  are  duplicated  in  detail  in  the  Sales  Ledger  and  Purchase 
Ledger.     Tlae  General  I^edger  together  with  the  Cash  Book  should  always  be  in  balance. 

428.  The  Purchase  Ledger  contains  the  accounts  with  the  firms  from  whom  goods  are  pur- 
chased. A  summary  from  this  Ledger  should  agree  with  the  Accoutits  Payable  Account  in  the 
General  Ledger. 

429.  The  Sales  Ledger  contams  the  accounts  with  all  the  customers  of  the  firm,  including 
C.  O.  D.  accounts;  and  a  sztmrnary  from  this  Ledger  should  agree  with  the  Accounts  Receivable 
Account  in  the  General  Ledger. 

Note — Firms  having  many  customers  divide  their  Sales  Ledgers  alphabetically,  thereby  making  sev- 
eral ledgers;  as,  from  A  to  H,  I  to  Q,  R  to  Z,  etc.;  or  geographically;  as,  City  Accounts,  Country  Accounts, 
etc.;  or,  Regular  Customers'  Accounts,  Transient  Accounts,  etc. 

430.  The  F'orni  of  J^edgers  used  depends  largely  upon  the  nature  and  completeness  of 
the  records  desired  to  be  kept  in  this  book.  For  the  Gefieral  Ledger  the  standard  ruling  illus- 
trated on  pages  22-23-24  is  generally  satisfactory. 

FORM    OF    SAIvFS    IVFDGFR 


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431.  For  the  Sales  J^edger  and  Purchase  Ledger  a  form  showing  the  "  terms  of  sale  or 
Purchase^ ^  and  ''balance'^  as  well  as  the  debits  and  credits  is  desirable.  In  business  the  loose  leaf 
system,  either  in  binder  form  or  in  box  ledger  style  is  preferred  by  most  business  houses. 


BUSINESS  PRACTICE    BOOKKEEPING  115 

432.  The  Form  of  Sales  Ledger  illustrated  on  page  114  is  a  favorite  one  among  book- 
keepers and  presents  the  following  salient  features: 

1.  The  Name  and  Address  of  the  customer. 

2.  His  Bank,  and  rati7ig  in  Dunn's  or  Bradstreet's. 

2.     The  number  of  the  Account  in  both  old  and  new  ledgers,  and  the  Terms  of  Sale. 

4.  Columns  for  Dates,  Items,  Debits,  Credits,  and  daily  balances. 

5.  It  also  has  double  ledger  columns  which  economize  space   and  therefore  requires 
fewer  changes  of  the  loose  leaves. 

433.  This  Same  Form  of  Ledger  with  slight  modifications  is  also  a  good  one  for  the  Pur- 
chase Ledger.  Columns  showing  terms  of  purchase,  date  the  bill  is  dtie,  and  discoiait  allowed  on 
each  individual  bill,  are  features  of  much  importance  in  the  form  of  a  Purchase  Ledger. 

CI^ASS^S    OF    ACCOUNTS 

434.  Accounts  may  be  divided  into  the  following  classes: 

1.  Property  Assets,  including  Cash,    Merchandise,    Furniture  and  Fixtures,   Real 
Estate,  Chattels,  etc. 

2.  Accounts  Receivable,  including  all  Sales  Ledger  Accounts,    Bonds,    Mortgages, 
Notes,  and  Acceptances  Receivable. 

3.  Accou7its  Payable,  including  all  Purchase  Ledger  Accounts,   Mortgages,  Notes, 
and  Acceptances  Payable. 

4.  Allowance  and  Operatiyig  Accounts,  including  Rent,  Salaries,  Interest  and  Dis- 
count, and  all  Expense  Accounts  generally. 

5.  The  Loss  and  Gain  Account,  into  which  all  the  losses  and  gains  of  other  ac- 
counts are  closed. 

6.  The  Proprietors'  Accounts,  both  private  and  proprietary,  or  stock  accounts. 

POSTING  TO  th:^  i<:eDG:RR 

435.  Posting  is  transferring  the  debits  and  credits  of  any  original  entry  to  a  Ledger  ac- 
count. Postings  are  usually  from  the  Journal,  Cash  ^ook,  Sales  Invoice  File  or  binder,  and 
Purchase  Invoice  File  as  follows: 

436.  Post  from  the  /our?ial  as  directed  in  Article  77,  p.  22. 

437.  Post  from  the  Cash  Book  as  directed  on  page  59.  Also  Post  the  footings  of  Ac- 
counts Receivable  columns,  both  net  and  discount,  to  the  credit  oi  the  Accozints  Receivable  Account, 
and  the  footings  of  Accounts  Payable  columns,  both  net  and  discount,  to  the  debit  of  the  Accounts 
Payable  Account  in  the  General  Ledger, 

438.  Contra  Discount,  after  being  transferred  to  the  opposite  sides  of  the  Cash  Book, 
is  posted  to  the  Mdse.  Discount  Account  in  the  General  Ledger.  The  Expense  footing  is  also 
posted  in  the  usual  manner. 

439.  Post  from  the  Sales  Invoice  File  by  debiting  Cash  in  the  Cash  Book,  and  by  crediting 
Mdse.  in  the  General  Ledger  for  the  total  footing  of  the  Cash  Sales  column.  Debit  in  the  Sales 
Ledger  each  buyer  with  the  amount  of  his  purchase  sold  on  account,  and  credit  Mdse.  with  the 
footing  of  the  Account  column.  Also  post  the  footing  of  the  account  column  to  the  debit  of  the 
Accounts  Receivable  Accounts  in  the  General  Ledger. 

440.  Post  from  the  Purchase  Invoice  File  by  crediting  Cash  in  the  Cash  Book  and  by  debit- 
ing Mdse.  in  the  General  Ledger  for  the  total  footing  of  the  Cash  Purchases  column.  Credit  in 
the  Purchase  Ledger  each  seller  with  the  amount  of  his  invoice  bought  on  account,  and  credit 
Mdse.  with  the  footing  of  the  Accouytt  column.  Also  post  the  footing  of  the  Account  column  to 
the  Credit  of  the  Account  Payable  Account  in  the  General  Ledger, 

Note — Mdse.  sold  or  bought  for  note  or  acceptance  may  be  posted  directly  to  Notes  Receivable  or 
Notes  Payable  Accounts,  and  the  proper  entry  made  in  the  Journal. 

441.  Check  all  items  as  posted  by  using  page  numbers.  When  footings  only  are  posted, 
check  the  items  with  a  check  ( (/  )  mark  and  the  footings  posted  by  page  numbers. 

442.  Special  attention  should  be  given  to  the  proper  dating  of  each  entry.  The  date  is  the 
date  of  the  original  entry,  and  not  always  the  date  of  posting.  Without  accounts  dates  it  will  be 
difficult  to  obtain  daily  balances  promptly. 


116  BUSINESS  PRACTICE   BOOKKEEPING 

Balances  and  Statements 

443.  A  Daily  Statement^  which  is  a  Trial  Balance  of  the  day's  work,  is  required  in 
this  system  of  Higher  Accounting.  Weekly  and  Moyithly  balances  may  be  made  up  from  the 
daily  or  weekly  statements,  and  the  quarterly,  semi-annual,  and  yearly  balances  may  also  be 
compiled  in  a  similar  manner. 

444.  The  General  I/Cdger  in  its  Accounts  Receivable  and  Accounts  Payable  Accounts  con- 
tains the  footings  brought  from  the  Cash  Book,  Sales  Invoice  File,  and  Purchase  Invoice  File,  thus 
completing  all  accounts  to  make  it  balance. 

445.  The  Daily  Balance  is  therefore  taken  from  the  General  Ledger  only .  The  datings 
guide  the  bookkeeper  in  knowing  which  items  belong  in  the  day's  statement. 

Note — The  Mechanical  or  Card  Ledger  is  very  convenient  in  taking  daily  balances.  The  cards  being 
loose  may  be  placed  in  a  compartment  by  themselves  after  postings  are  made  to  them;  thus,  only  the  active 
accounts  for  the  day  are  handled  in  finding  the  daily  balance.  When  the  ordinary  or  loose  leaf  ledger  is 
used,  tag  clips  may  be  inserted  at  each  account  to  which  items  have  been  posted. 

446.  A  General  Balance  may  also  be  taken  daily  instead  of  a  "  daily  balance' '  if  pre- 
ferred. This  consists  of  a  complete  trial  balance  of  the  General  Ledger,  the  personal  accounts 
being  summarized  in  the  Accounts  Payable  and  the  Accounts  Receivable  Accounts. 

THIS    SK^I/BTON    I^^DGBR    PROOF    SHE^T 

447.  The  Skeleton  J^edger  System  of  proving  the  Personal  Ledger  used  by  banks  and 
some  large  mercantile  firms  where  many  accounts  are  carried,  comparatively  few  of  which  are 
changed  daily,  is  a  great  modern  labor  saver,  and  should  be  fully  exemplified  in  the  Commercial 
Exchange  or  Emporium. 

448.  The  Trial  Balance  is  found  in  the  usual  manner,  there  being  but  few  accounts  in 
the  General  Ledger.     This  is  usually  but  a  few  moments  work. 

449.  To  Reconcile  the  Personal  Ledger  accounts  (Sales  Ledger  and  Purchase  Ledger) 
with  the  Accounts  Receivable  and  Accounts  Payable  accounts  in  the  General  Ledger  proceed  as 
follows: 

1.  Forward  on  special  ruled  paper  having  four  money  columns,  all  the  previous 
day's  balances  of  those  accounts  to  which  the  day's  items  have  been  posted.  Accts.  Re- 
ceivable in  column  1,  and  Accts.  Payable  in  column  3,  each  opposite  the  title  or  number  of 
the  account. 

2.  Next  forward  the  day's  balances,  Accts.  Receivable  to  column  2,  and  Accts. 
Payable  to  column  4,  each  opposite  the  title  or  number  of  the  account. 

3.  To  the  previous  day's  Accounts  Receivable  total  add  the  sum  of  today's  and 
subtract  the  sum  of  yesterday's  balances  of  the  changed  accounts.  This  will  give  the  new 
Accounts  Receivable  balafice. 

4.  To  the  previous  day's  Accounts  Payable  total  add  the  sum  of  today's  and  sub- 
tract the  sum  of  yesterday's  balances  of  the  changed  accounts;  this  will  give  the  new  Ac- 
counts Receivable  balance. 

5.  To  verify  the  accuracy  of  the  work,  the  difference  between  the  New  Accts. 
Rec.  Balance  for  the  day  and  the  New  Accts.  Pay.  Bala?ice  for  the  day  should  equal  the 
balance  of  the  Accounts  Receivable  and  the  Accounts  Payable  Accounts  in  the  General  Ledger. 


BUSINESS  PRACTICE  BOOKEEPING 

General  Balance  and  Proof  Sheet,  July  1st  and  2d 


117 


July 

1st 

July 

2d 

CASH 

5282  50 

6404  50 

Merchandise  Purchases 

120427  45 

123585  95 

Merchandise  Sales 

78342  15 

80792  15 

Returned  Goods 

321  40 

321  40 

Merchandise  Discount 

1042  50 

1042  50 

Rebates  and  Allowances 

120 

120 

Real  Estate 

10000 

10000 

. 

Furniture  and  Fixtures 

2400 

2400 

Chattels 

1750 

1750 

Notes  Beceivable 

6345  50 

6345  50 

GENERAL  BAL- 

Notes Payable 

1920 

2120 

ANCE,  July  2 

♦Accounts  Receivable 

21475  20 

24648  85 

*24648  85 

♦Accounts  Payable 

11225  60 

16129  75 

*16129  75 

Expense 

734  10 

934  10 

Hal.  8519  10 

Interest  and  Discount 

184  75 

284  75 

Collection  and  Exchange 

21  35 

21  35 

Com' 1  Exchange,  Stock 

78247  50 

78247  50 

Totals   169920  00   169920  00 


177574  15    177574  15 


JPMRSONAI,  I^UDGBR 

July  2 


Accis.  Receivable 

Col.  1  Col.  2 


Accts.  Payable 

Col.  3  Col.  4 


PERSONAL  ACGTS . ,  July  1 

21475  20 

11225  60 

Brown,  W.  C. 

320 

1320 

Berven,  0. 

612  50 

267  25 

Call.  J.  M. 

432  15 

567  85 

Ham,  W.  H. 

634  50 

1334  50 

Jacobs,  H.  W. 

1000 

Lang,  C.  L. 

750 

Lepori,  E. 

1197 

855  50 

Monsen,  H.  G. 

1000 

750 

Nelsen,  A. 

269  50 

1269  50 

Phillips.  E.  J. 

234  75 

Russell,  P. 

847 

Stretton,  E.  M. 

106 

Trembley.  H, 

500 

5 

Totals 


5200  15 


26899  20 


847  25 


14027  20 


5200  15 

847  25 

New  Accts.  Receivable 

21699  05 

13179  95 

New  Accts.  Payable 

13179  95 

Balance 

8519  10 

Note — The  above  illustrates  the  method  of  proving  the  accuracy  of  the  Personal  Ledgers.  The  stu- 
dent will  apply  the  foregoing  explanations  to  the  above,  and  will  readily  understand  how  to  reconcile  the 
Personal  Accounts  with  the  General. 


118 


BUSINESS    PRACTICE    BOOKKEEPING 


6.  '  In  a  Nutshell:^'  To  the  previous  day' s  Balance  of  the  Personal  Ledger  Ac- 
counts add  the  day' s  asset  increase  or  subtract  the  day' s  asset  decrease  of  the  affected  personal 
accounts;  the  result  should  equal  the  day' s  balayice  of  the  Accounts  Receivable  and  Accounts  Pay- 
able accounts  in  the  General  Ledger. 


Illustration: 


July  2,  Accts.  Rec. 
"     1,     " 


%  5424.00 
5200.15 


July  2,  Accts.  Pay.    $  2801.60 
"      1,       "         "  847.25 


Proof 


Balance  "  "  223.85  Balance       1954.35 

$1954.35  —  $223.85  =  $1730.50  Net  day's  asset  decrease. 

$21475.20  —  $11225.60  =  $10249.60  Personal  Accts.  Bal.  July  1st. 
$10249.60  —  $1730.50  =  $8519.10  Personal  Bal.  July  2d. 


$24648.85  —  $16129.75  =  $8519.10 


2d. 


450.  The  balance  Sheet  is  made  out  in  the  usual  manner,  the  losses  and  gains  carried 
to  the  proprietors'  accounts  and  the  L,edger  closed. 

451.  An  Accounts  Receivable  and  Payable  Tickler  similar  to  the  Notes  Receiva- 
"ble  and  Payable  Book  is  very  convenient  in  determining  the  maturity  of  bills  and  invoices  sold 
or  bought.  No  illustration  of  this  book  is  given  here,  leaving  that  featture  to  the  originality  of 
the  bookkeeper. 


RED    AND    BI^ACK    SYSTEM 

451a.  The  Red  and  Black  system  of  distinguishing  the  Resources  from  the  Liabilities 
is  quite  popular  not  only  in  banks  but  also  in  many  wholesale  and  commission  houses. 

451^.  The  Resources  are  written  in  Red  Ink  and  the  lyiabilities  in  Black  Ink,  thus  in 
ledgers  using  a  Balance  column  the  debit  or  credit  balances  are  readily  distinguished. 


DATE 

ITEM 

Fol. 

DEBIT              1             CREDIT 

/             BALANCE 

DATE          1    ITEM 

Fol. 

DEBIT 

CREDIT           11^ 

J|          BALANCE 

9^ 

/ 

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Dl^BIT    BAI,ANC:e    AND    CR:EDIT    BAI,ANC:e    FORM 

451^.  The  Debit  Balance  and  Credit  Balance  loose  leaf  ledger  page  is  a  form  very  popular 
with  bookkeepers,  and  differs  from  the  one  illustrated  above  by  having  two  balance  columns , 
one  on  the  debit  and  one  on  the  credit  side. 

.'.■  451flf.  At  the  close  of  each  week,  the  debit  and  also  the  credit  balances  of  the  Personal  Ledger 
should  be  totaled  and  reconciled  with  the  Accotints  Receivable  and  the  A cco7ints  Payable  in  the 
Skeleton  Ledger  Proof  Sheet. 


Actual  Business  Practice 

Wholesale  and  Jobbing 

G:eNERAI,    INSTRUCTIONS 

452.  Object:  The  object  of  this  Set  of  Higher  Accounting  is  to  teach  a  modern  method 
of  practical  bookkeeping  especially  adapted  to  a  large  wholesale  business  where  it  is  necessary 
that  daily  balances  be  found  and  personal  accounts  verified. 

453.  Sooks  Used:  The  books  used  in  the  Wholesale  Office  are  the  Journal,  Cash  Book, 
Sales  Invoice  File,  Purchase  Invoice  File,  Notes  Receivable  and  Payable  Book,  and  Bank  Books. 
An  Accounts  Receivable  and  Payable  Tickler,  and  a  "  Rehiryied  Goods  "  file  may  also  be  used. 

454.  'Principal  features:  The  principal  features  presented  in  this  system  of  Whole- 
sale Accounting  are  as  follows: 

1.  The  lyoose  lycaf  System  of  recording  sales  and  purchases. 

2.  The  Wholesale  Journal,  two  forms. 

3.  The  Eight  Column  Cash  Book,  and  uses  of  special  columns. 

4.  The  introduction  of  "  Returned  Goods,"  "  Mdse.  Discount,"  and  "Rebates 
and  Allowance"  accounts. 

5.  Contra  Discount,  how  transferred  and  how  posted  from  the  Cash  Book. 

6.  The  Wholesale  lycdgers,  with  special  form  for  Sales  Ledger  showing  daily 
balances. 

7.  Methods  of  Posting  from  all  the  books  and  files  of  Original  Entry. 

8. .  The  Daily  General  Balance  and  the  daily  reconciliation  of  the  Personal  Ledger 
with  the  Accounts  Receivable  and  Payable  in  the  General  Ledger. 

455.  Requirements:  The  following  requirements  must  be  strictly  complied  with  in 
order  to  receive  promotion: 

1.  The  student  must  satisfactorily  conduct  the  Wholesale  Office  for  at  least  ^/i?ee 
weeks. 

2.  Students  admitted  to  this  department  of  Higher  Accounting  should  take  much 
pride  in  doing  everything  well,  and  in  keeping  their  offices  in  order  and  their  books  neat 
and  clean.  Here  begins  the  final  test  whether  a  student  is  qualified  and  capable.  Let 
"  Order,  Neatness,  and  Dispatch  "  be  his  motto. 

3.  To  receive  an  O.  K.  in  this  Set,  the  student  must  make  at  least  Jive  debit  and 
five  credit  entries  in  the  Cash  Book  and  at  least  one  entry  in  each  column  each  day.  Cash 
must  be  proved  at  the  close  of  each  day's  work,  also  balanced  and  ruled  twice  per  week. 

4.  Students  are  required  to  have  not  less  than^Lr  personal  accounts  changed  in  each 
day's  work.  This  is  necessary  to  fully  exemplify  the  reconciliation  of  the  personal  accounts 
with  the  Accounts  Receivable  and  Payable  in  the  General  Ledger. 

5.  Postings  must  be  made  at  the  close  of  each  day's  work,  a  daily  statement  ren- 
dered, and  the  personal  accounts  verified. 

6.  The  books  must  receive  the  teacher's  O.  K.  on  each  day's  work  before  pro- 
ceeding with  the  next. 


120 


BUSINESS    PRACTICE    BOOKKEEPING 
TRADING    STAT^MISNTS 


456.  A  Trading  Statement  shows  the  £-ross  profits  of  a  business  for  a  stated  period  and 
should  be  made  out  with  much  care  and  accuracy.  The  following  condensed  form  will  give  a 
good  idea  of  its  usefulness,  especially  to  the  manager  of  a  business: 


//l-'t::^.dxy^'d---€:i--c-e^-.'^^ 


'^■■^ 


_<<^-^  L/U-c^Cy 


/s^¥S:is' 


/¥/  ^y 


//^^v 


:ijr^3 


^^ 


30^ 


APPROXIMATE    PROFITS 

457.  Sometimes  it  is  desirable  to  ascertain  the  approximate  profits  of  a  business  in  order 
to  further  some  feature  for  the  general  good  of  the  firm.  This  may  be  accomplished  by  using 
the  rate  of  profit  on  the  sales  of  the  previous  term  as  a  basis  to  compute  the  profits  for  the 
present  term.  This  will  give  a  fair  idea  of  the  gain  or  loss,  provided  the  business  is  running 
about  the  same  as  during  the  preceding  year. 


BUSINESS    PRACTICE    BOOKKEEPING 


121 


PROFIT    AND    I,OSS    STATEMENT 

458.  A  Pro£t  and  I/OSS  Statement  is  necessary  when  the  nei  profits  of  a  business  is 
desired.  The  different  sundries  Expeyise  accounts  such  as  rent,  salaries,  office  supplies,  stationery, 
insurance,  interest  and  discount^  collection  and  exchange,  etc.,  must  be  deducted  from  the.  gross  profits 
to  ascertain  the  net  profits  of  the  business.  The  following  is  a  fair  illustration  of  a  Profit  and 
Loss  Statement: 


<i2--?-z-'«^ 


3/, 


Terms,  Charges,  Btc. 


459.  Terms:     Sell  on  60  days'  time,  net.     Give  2%  off  for  cash  in  30  ds.,  and  5%  off 

for  cash  in  10  ds.  if  paid  in  New  York,  Chicago,  or  San  Francisco  exchange.     Sales  for  notes, 

personal  drafts,    orders,  due  bills,  part  cash,  note,  draft,  etc.,  are  net. 

Note — For  the  convenience  of  school  use  time  bills,  notes,  drafts,  etc.  for  10  ds.  are  payable  the  next 
day;  if  for  30  ds.  are  payable  in  3  days;  if  for  60  ds.  are  payable  in  5  days  of  actual  time,  etc.  Interest  and 
discount  should  be  computed  for  the  full  time  indicated  in  all  commercial  paper  and  not  for  the  short  periods 
above  mentioned. 

460.  All  bills  from  Commercial  Exchange  are  listed  at  manufacturer' s  prices,  with  terms  on 
each  invoice.  Sales  between  wholesalers  and  commission  merchants  are  subject  to  a  regular  trade 
discount  of  5%  and  also  to  the  regular  time  discounts  allowed  to  retailers. 

461.  All  merchandise  sold  must  be  delivered  to  the  Transportation  Company,  except  special 
orders  covered  by  the  teacher's  O.  K.,  and  all  merchandise  bought  will  be  received  through  the 
same  office,  where  freight  charges  will  always  be  collected. 

462.  Charges:     Charges  shall  be  made  as  follows: 

1.     Commission,  on  sales,  purchases,  and  collections, 
$500  and  under,  5  per  cent. 
$501  to  $1000,     4  per  cent. 
Over  $1000,     3  per  cent. 
Insurance,  on  all  consignments  kept  in  warehouse  more  than  one  day, 


2. 


1  per  cent 
3 
4 


Guaranty,  on  all  sales  of  consignments  on  account,  2  per  cent. 
Freight  and  Drayage,   as   charged   by    the    transportation  company,    1% 
freight  shipments,  and  2%  on  express  packages. 

5.     Storage,  on  all  consignments  kept  more  than  one  day  in  warehouse,  %%. 


on 


122  BUSINESS  PRACTICE  BOOKKEEPING 

GUIDB    NO.     11.     Wholesale  and  Jobbing 

First    Week 

Note — Study  thoroughly  the  discussions,  text,  and  forms  under  "The  Wholesale  Office/'  pages  107  to 
118  inclusive  and  be  able  to  ansvrer  every  question  on  page  before  attempting  to  proceed  with  this  work. 

Special  Notice — When  the  business  of  each  item  is  completed  the  student  will  place  a  check  mark 
( v')  in  the  small  circle  at  the  left  of  the  number  of  the  item.  Students  are  held  strictly  accountable  for  any 
deviation  from  this  rule. 

MONDAY'S  BUSINESS 

O  '  1-  Open  j-'our  books  with  a  verified  statement  of  your  Resources  and  Liabilities.  Should 
you  have  any  notes,  stocks,  or  bonds  on  hand  or  outstanding  with  interest  accrued,  it  will  be 
necessary  to  have  an  Interest  Receivable  or  Payable  inventory  in  your  Statement.  This  open- 
ing Statement  must  have  the  teacher's  O.  K.  before  proceeding  further.  Also  open  an  ac- 
count with  your  bank  by  making  a  deposit  of  all  but  $100  of  the  cash  on  hand. 

O  2.     Pay  one  week's  rent,  $100,  by  check  to  the  real  estate  agent  and  get  his  receipt. 

O  3.     JBizy  stationery,  postage  stamps,  etc.,  for  cash,  $10.     Pay  for  store  sign  $25  and  put 

it  in  proper  place.     Get  receipted  bills. 

O  4.     Engage  a  traveling  salesman  at  a  salary  of  $50  per  week.     Advance  him  $100  ex- 

pense money. 

O  5.      "  Stock  up  "  your  establishment  with  a  full  line  of  General   Merchandise.     See  how 

orderly  you  can  make  your  store  look,  then  ask  your  teacher  to  inspect  your  place  of  business. 

O  6.      Write  a  display  advertisement  for  the  daily  paper  and  order  it  inserted  for  one  week. 

Pay  for  same  in  cash,  $12.50,  and  get  a  receipt. 
O  7.     Pay  printing  bills  for  notes,  drafts,  order  sheets,  bill  heads,  etc.,  in  cash,  $10.50. 

Get  receipt. 
O  8.     Tiny  Office  Desk,  $85;  also  Office  Safe,  $225,  on  account. 

O  9.     IRuy  Motor    Delivery   Car    and  give  cash  $4  50,    and   your  note  at  90  days,  with 

interest  at  8  %  for  same,  $450 
O         10.     IPay  for  Gasoline  $30,  Lubricating  oil  $5,  and  Coal  for  office,  $15,  in  cash. 

ffdi  If  you  have  performed  all  the  business  indicated  above,  and  have  entered  the  same  in  the 
proper  books,  you  may  proceed  to  post.  Date  and  check  every  entry,  then  prove  cash  and  take  a 
daily  statement  which  you  will  file  for  future  use.  Put  your  office  in  order  and  report  to  your 
teacher  for  O.  K. 

Note — You  should  now  begin  to  plan  tomorrow's  business.  Solicit  orders  and  if  necessary  do  extra 
advertising.  The  field  is  open  to  all  and  you  are  expected  to  show  your  ability  to  get  your  share  of  the 
business. 

TUESDAY'S  BUSINESS 

O  1-     Receive  your  mail,  freight,  and  express.     Pay  charges  on  same. 

O  2.     Answer  all  letters  and   telegrams.     Acknowledge  receipt  of  all   moneys,  and  make 

proper  entries  in  Cash  Book. 

O  3.     Ntiynber  each  order,  and  fill   the  same  promptly.     Bill  on  60  ds.  time,  net^  and  dis- 

count according  to  "  Terms'"  for  wholesaler. 

O  4.      Originate  a  ' '  key' '  for  marking  cost  prices  of  merchandise  and  explain  same  to  teacher. 

O  5.     Remit  Commercial  Exchange  by  bank  draft  in  full  for  one  invoice  bought  less  dis- 

count, 5  %  for  cash  in  10  ds. 

vO  6.      Take  one  card  of  Carpet  stock  for  office  use.     Hand  same  to  teacher  and  tell  him 

what  entry  you  will  make. 


BUSINESS    PRACTICE    BOOKKEEPING  123 

O  7.     Telegraph  for  certain  goods  needed  to  fill  orders.     Have  same  sent  C.  O.  D. 

O  8.     Buy  Real  Estate  for  note  and  cash.     Borrow  $1000  at  the  bank  on  note  at  60  ds., 

interest  at  6%. 

O  9.     Make  not  less  than  five  sales  per  day  on  account.     Sell  to  other  wholesolers  if  nec- 

essary. 

O  10.  Se7id  some  one  a  shipment  of  4  kinds  of  produce  to  be  sold  on  your  account  and 
risk.     Prepay  freight.     Also  receive  a  consignment  to  be  sold  on  commission. 

M^  If  you  have  completed  all  of  the  above  work  and  entered  the  same,  post,  prove  cash, 
take  a  daily  statement  and  file  same  with  yesterday's.  Make  out  and  mail  your  orders  for 
tomorrow.     Put  your  office  in  order  and  present  books  for  O.  K. 

WEDNESDAY'S    BUSINESS 

O  1-     Receive  your  mail,  freight,  and  express.     Pay  charges  on  same. 

O  2.     Answer  all  correspondence,  receipt  bills,  make  remittances,  etc.,  and  enter  same  in 

books. 

O  3.     Make  out  bills,  fill  all   orders  accurately,  and  ship  goods  promptly.     Mail  shipping 

receipts  with  bills. 

O  4.      Writer,  ''circular  letter''   of  about  100  words  and   ask  the  principal  of  the  Steno- 

graphic Department  to  have  a  dozen  of  the  same  typewritten,  carbon  copies  will  do,  and  mail 
the  same  to  prospective  customers.     Pay  $10  for  same. 

O  5.         Student,'''  who  owes  you  on  account,  has  been  declared  bankrupt.     Recive  80  cents 

on  the  dollar,  and  give  him  a  receipt  in  full. 

O  6.     Sell  several  special  bills  for    5%    and  2%  off  for  cash.     Show  discounted  bill   to 

teacher  for  approval. 

O  7.     Sendson\&  wholesaler  $1000  cash  on  account  and  ask  him  to  honor  your  drafts  when 

presented. 

O  8.     Pay  $100  on  account  of  Office  Safe  bought  last  Monday. 

O  9.     Send  Commercial  Exchange  your  90  day  note  for  $900,  with  int.  at  6%,  on  account. 

Also  draw  on  some  one  who  owes  you  and  send  draft  to  Com'l  Exchange  on  account. 

O  10.  Return  5  cards  of  Mdse.  to  Com'l  Exchange  as  "  not  up  to  sample."  Make  a  par- 
tial payment  on  some  note  outstanding.     Collect  ditto. 

M^  '  If  all  of  the  above  business  has  been  performed  and  entries  made,  post,  take  the  usual  daily 
statement,  prove  and  balance  cash,  and  make  out  and  mail  your  orders  for  tomorrow.  Put  your 
office  in  order  and  present  books  for  O.  K.     Now  rustle  for  business. 

THURSDAY'S  BUSINESS 

Receive  your  mail,  freight,  and  express.     Pay  charges. 
Buy  Stationery,  Postage  Stamps,  and  pay  P.  O.  box  rent. 

Answer  correspondence,  receipt  for  moneys  received,  and  make  proper  entries. 
Render  bills  and  ship  goods  for  all  orders  received.     Prepay  freight  on  some  of  them 
and  include  the  same  in  bill. 

O  5.     Issue  three  notes  payable  at  30,  60,  and  90  ds.,  respectively,  with  interest  at  6%. 

O  6.     Receive  three  or  more  notes  at  30,  60,  and  90  ds.,  respectively,  with  interest  at  6%. 

O  7.     Draw  drafts  on  two  of  your  customers  at  sight,  10  ds.,  and  30  ds.,  respectively. 

Write  and  ask  them  to  honor  the  same. 

O  8.     Solicit  several  consignments  and  make  several  shipments  to  be  sold  on  commission. 

O  9.     Draiv  your  check  for  $160,  cash  it,  and  take  $100  for  private  use,  $50  for  office  use, 

and  leave  $10  with  your  teacher  for  charity. 


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124  BUSINESS  PRACTICE  BOOKKEEPING 

O         10.     Z>zVc^(?««/ several  notes  at  bank  and  receive  Certificate  of  Deposit  for  proceeds;  you 
ma>  also  collect  on  paper  not  yet  due,  discounting  same  at  8  %  for  time  yet  to  run- 
^tf^Post,  take  the  usual  daily  statement,  prove  cash,  and  make  out  your  mail  orders  for  next 

Monday,  as  no  orders  will  be  placed  Friday.     Report  to  teacher  for  O.  K. 

FRIDAY'S   BUSINESS 
Collection  Day 

O  1-     Receive  your  mail,  freight,  and  express.     Pay  charges  on  same. 

O  2.     Answer  all  correspondence,  receipt  bills,  order  goods,  make  out  bills,  ship  goods,  etc. 

O  3.      Collect  2i.w6.  pay  2S\.  bills  due  today.     Examine  Tickler  for  accounts  Receivable  and 

Payable,  and  notes  Receivable  and  Payable.     Look  after  this  business  carefully. 

O  4.     Pay  traveling  agent's  salary  for  week,  $50.     Also  engage  a  clerk  for  next  week  at  a 

salary  of  $25  per  week;  advance  him  $5  to  pay  his  board  bill  for  the  coming  week. 

O  5.     Reyit  desk  room  in  your  store  for  a  week  and  receive  $15  cash  from  teacher  for  same. 

O  6.     Buy  Typewriter  and  Desk,  and  letter  file  Cabinet,  for  cash.  Also  buy  and  sell  stocks. 

O  7.     Return  goods  not  up  to  sample,  receive  "Memorandum  of  Credit,"  and  receive  goods 

returned,  and  give  "  Mem.  of  Credit."  I^ook  out  for  errors  and  shortages  in  all  bills  and  cor- 
rect the  same. 

O  8.     Write  to  Transportation  Company  for  rates  on  car  load  lots  of  your  heaviest  line  and 

get  special  freight  rates.     Show  letter  to  teacher. 

O  9.      Transact  all  necessary  business  in  regard  to  bank  affairs,  depositing  checks,   dis- 

counting paper,  etc.     Leave  your  Pass  Book  at  the  bank  to  be  "written  up." 

O         10.     Post,  prove  cash,    take  daily  statement.     Take  inventories  complete  and  make  out 

Trial  Balance  and  Balance  Sheet,  and  close  the  Ledger.     Present  books  for  O.  K. 

Note — Take  pencil  and  paper  with  you  and  make  a  memorandum  of  all  corrections  and  suggestions 
made  by  your  teacher.     Try  to  profit  by  these  suggestions. 


WHOI,BSAI,E    AND    JOBBING- -Continued 

Second  "Week 

Note — Read  again  the  discussions  relating  to   the  Skeleton  Ledger  proof  sheet  on  pages  116  and  117, 
for  during  this  week  and  next  you  will  prove  each  day's  work  by  this  method. 

MONDAY'S  BUSINESS 

O  1-     After  arranging  your  desk  in  order,  with  a  place  for  everything  and  everything  in  its 

place,  you  will  attend  to  your  morning's  mail,  freight,  and  express  as  previously  directed. 

O  2.  •   Do  not  pay  rent  this  week.     It  will  be  a  liability  inventory  in  your  balance  sheet  at 

the  close  of  the  week's  business.  Buy  stationery,  and  pay  balance  due  on  Office  Desk  and 
Safe. 

O  3.     Pay  $150  on  note  given  for  Motor  Delivery  Car,   and  see  that  same  is  indorsed 

properly. 

O  4.     Buy  a  Cash  Register,  $275,  by  check.     Have  show  cases  and  shelving  put  in  store  at 

a  cost  of  $1225.     Pay  one  half  on  account  of  same  by  check. 
O  5.      Write  \^NO  "want"    advertisements;  one  for  an  assistant  bookkeeper,  and  one  for  a 

stenographer,  and  pay  for  one  week's  insertion,  $5. 
O  6.     Pay  gas  and  electric  bill,  $7.25;  Doctor's  bill,  $20. 

O  7.     Exchange  your  Office  Desk  and  Chair  for  a  new  one,  paying  $50  extra  for  same. 

O  8.     Sendyowx  traveling  man  $75  expense  money.    Collect  rent  for  desk  room,  $15.    Give 

Janitor  $2.50  for  floor  dressing  purchased. 


BUSINESS    PRACTICE    BOOKKEEPING  125 

O  9.     Sell  horn,  consignments  received  last  Thursday  for  cash  and  on  account.     Close  one 

or  more  of  them  out  and  render  Account  Sales. 

O  10-  Skip  2  invoices  of  Produce  to  be  sold  on  your  account  and  risk.  Prepay  freight  on 
one.  Ask  an  advance  of  $100  on  another;  also  Receive  2  consignments  to  be  sold  on  commis- 
sion.    Pay  freight  on  same  and  advance  $100  on  one. 

K^  If  you  have  completed  the  above,  proceed  as  usual  to  post,  prove  cash,  and  take  a  General 
Balance.  You  will  prove  the  accuracy  of  your  Personal  Accounts  as  discussed  and  illustrated  by 
the  Skeleton  L,edger  Proof  Sheet,  Art.  447  to  450.     Report  to  teacher  and  receive  your  O.  K. 

TUESDAY'S  BUSINESS 

O  1-     Attend  to  your  mail,  freight,  and  express.     Answer  all  letters,  receipt  for  all  moneys, 

and  make  proper  entries  in  books. 

O  2.     Fill  all  orders  received,  bill,  ship  goods,  and  make  proper  entries   for  same.     Give  a 

special  discount  of  2%  oji  all  sales  today. 

O  3.     Make  all  remittances  by  bank  drafts.     Buy  not  less  than  two  drafts  daily. 

O  4.     Sell  from  consignments  received,  all  of  one  and  part  of  two.     Render  Account  Sales 

of  the  one  sold. 

O  5.     Receive  Acct.  Sales  from  students  to  whom  you  sent  shipments.     Look  after  this 

business  closely. 

O  6.     Give  some  student  a  Mem.  of  Credit  for  $10,  rebate  on  bill  sold  yesterday.    Also  give 

another  a  receipt  for  $5  for  favors  received. 

O  7.     Pay  your  teacher  $5  for  each  time  you  receive  assistance  from  him.    Receive  a  Mem,. 

of  Credit  for  "overcharge"  on  some  bill  bought  of  Com'l  Exchange. 

O  8.     Make  out  a  "  Model  Bill"  of  not  less  than  5  items  and  present  to  teacher  for  inspec- 

tion.    After  criticism,  rewrite  and  hand  in  for  record. 

O  9.      Telegraph  for  a  special  line  of  goods,  night  letter,  and  present  same  for  O.  K.  before 

sending. 

O  10.  Draw  drafts  on  accounts  due  and  not  settled.  Accept  or  pay  all  drafts  drawn  on 
you.  Discount  all  paper  at  30  ds.  or  over  at  bank.  Leave  short  time  paper  at  bank  for 
collection. 

Ijdi  Close  the  day's  work  as  usual.  Reconcile  the  Personal  Accounts,  and  report  to  teacher 
for  O.  K. 

WEDNESDAY'S    BUSINESS 

O  1.     Attend  to  your  usual  morning's  business  as  previously  directed.     Try  to  think  up 

some  improvement  on  each  day's  work.     More  independence  is  expected  of  you. 

O  2.     Ship  goods  by  freight  and  express,  some  C.  O.  D.     Be  sure  to  get  shipping  receipts 

and  bills  of  lading  which  you  will  forward  with  invoices. 

O  3.     kS.?// today  at  a  special  discount  of  5%,  and  2%  off  for  cash. 

O  4,     Give  a  special  discount  of  2%  on  all  bills  sold  on  account,  30  ds.     Sell  not  less  than 

five  such  bills. 

O  5.     Collect  dividends  on  stocks,  interest  on  notes,  and  cash  on  account. 

O  6.      Your  traveling  agent  returns  and  hands  over  $42.75,   unexpended  expense  money. 

Call  on  teacher  for  same  and  make  entry. 

O  7.     Receive  goods  "not  up  to  sample"  returned  and  give  credit  memorandum  for  same. 

Also  return  goods  "not  up  to  sample"   and  receive  memorandum  of  credit.     Make  proper 
entries. 

Make  partial  payments  on  notes  outstanding  and  receive  ditto.     Endorse  correctly. 
Collect  on  accts.  not  yet  due  and  give  discounts.     Pay  ditto. 

Order,   by  letter   and  order  sheets,   goods  to   be  sent  by  freight  and  express,  both 
Receive  orders  ditto. 

^^Close  the  day's  work  as  usual.  Prove  cash,  take  general  balance  and  reconcile  the  personal 
accounts. 


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126  BUSINESS  PRACTICE  BOOKEEPING 

THURSDAY'S  BUSINESS 

Attend  to  the  morning's  routine  work  as  usual. 
Eill  all  orders  promptly  and  ship  goods  at  once. 

Buy  a  small  Office  Desk,  $20,  and  an  adding  Machine,  $500,  with  10  %  off  for  cash. 
Send  out  statements  of  account  to  all  your  customers.     Accounts  not  yet  due  should 
be  marked      For  Comparison.'^     Accounts   ''long  overdue' '   should  be  noted  and    ''  A)t  early 
remittance  will  greatly  oblige^'  stamped  or  written  on  same. 
O  5.     ^'(f// remainder  of  consignments  on  hand   and   render  Account  Sales.     Ask  for  Ac- 

count Sales  of  all  shipments  not  yet  heard  from. 
O  6.     Draw  on  two  parties  who  owe  you  in  favor  of  Com'l  Exchange,  and  mail  the  same. 

Accept  or  pay  drafts  drawn  on  you. 
O  7.     Draw  cash  $250  from  bank  for  private  use.   Hand  $50  of  same  to  teacher  for  charity. 

O  8.     Pay  all  small  balances  due  and  rule  up  the  accounts. 

O  9.     Pay  $500  on  note  given  for  Real  Estate  and  give  new  note  for  balance  and  interest. 

O  10.  Deposit  all  checks  and  cash  in  bank.  Prove  your  bank  accounts  with  your  cash  book 
and  verify  your  Notes  Receivable  and  Notes  Payable  Accounts. 

^iF^Close  the  day's  work  as  usual.     Prove  cash,  take  general  balance  and  reconcile  the  per- 
sonal accounts. 

FRIDAY'S   BUSINESS 
Collection  Day 
O  1.     Attend  \.o  vcL2iS\.,  freight,  express,  etc. 

O  2.     Fill  all  orders,  bill  and  ship  goods  as  usual. 

O  3.     Pay  traveling  agent's  salary,  $50,  by  check.     Credit  clerk  for  salary  which  he  does 

not  wish  to  draw,  $20. 

O  4.      Collect  and  pay  interest  on  all  notes  on  hand  or  outstanding. 

O  5.     Sell  all  notes  at  30  ds.  or  over  at  bank.     Collect  on  all  other  notes  due  in  full  or  in 

part. 

O  6.     Buy  and  sell  stocks.     Do  not  bid  higher  than  the  incomes  warrant.     Stocks  should 

pay  from  6  %  to  20  %  profit. 

O  7.     Collect  on  statements  sent  out  and  pay  on  all  statements  received. 

O  8.     Reconcile  the  Pass  Book,  Deposit  I,edger,  and  Cash  Book  accounts.     File  all  checks 

properly. 

O  9.      7a^<? /«z'<?«/(?ry  complete,  including  J/(/^<?. ,  Chattels,  Furniture  a7id  Fixtures ,  Real  Es- 

tate, Notes  Receivable,  Notes  Payable,  Expense  (unpaid  rent),  etc. 

O  10.  Take  Trial  Balance.  Are  your  inventories  complete?  Unpaid  rent,  $100,  etc.  Make 
out  a  Balance  Sheet.  Close  the  I^edger,  and  reconcile  the  personal  accounts  with  the  Accounts 
Receivable  and  Accounts  Payable  in  the  General  I^edger. 

^M  Arrange  your  office  in  perfect   order  and  ask  your  teacher  to  inspect  the  same.      Get 
your  books  O.K'd. 


BUSINESS    PRACTICE    BOOKKEEPING  127 

WHOI^BSALB    AND    JOBBING-Concluded 

Third  Week 

Note — The  methods  of  General  Balance  and  Skeleton  Ledger  proof  sheets  observed  during  the  past 
will  obtain  the  coming  week.  Much  latitude  will  be  given  the  student  in  this  week's  work,  and  he  is  ex- 
pected to  show  much  ability  in  the  conduct  of  his  office. 

MONDAY'S  BUSINESS 

O  1-     Admit  a  partner  by  selling  him  a  one- fourth  interest  in  the  business,  for  cash  and 

note.  Draw  up  Articles  of  Co-partnership,  which  both  partners  will  sign.  Place  the  same  "in 
escrow' '  for  safe  keeping.  You  are  to  receive  a  salary  to  be  agreed  upon  for  conducting  the 
business  and  keeping  the  books.  The  losses  and  gains  are  to  be  divided  in  proportion  to  the 
investments. 

O  2.     Prepare  to  push  business  this  week  by  extra  advertising.     Write  three  ads:  a  quarter 

page  display  quoting  prices,  a  quarter  column  reading  notice,  and  a  "want  ad."  Present  same 
for  criticism  and  approval.  Pay  for  them  in  cash:  $22.50  for  display;  $8.50  for  reading 
notice;  and  $1.50  for  "Wanted." 

O  3.     Look  after  mail,  express,  and  freight,  as  usual. 

O  4.     Make  all  shipments  required  and  enter  same  in  books. 

O  5.     Stock  up  for  a  lively  trade.     Pay  part  cash  and  ask  for  discounts. 

O  6.     Look  over  your  Furniture  and  Fixtures  and  exchange  the  same  for  new.     Pay  differ- 

ence in  cash. 

O  7.     Receive  90  cents  on  the  dollar  from  some  student  in  full  of  account. 

O  8.     Pay  90  cents  on  the  dollar  to  some  student  whom  you  owe  in  full  of  account. 

O  9.      Your  Stock  of  boots  and  shoes  having  been  on  hand  for  some  time  and  now   "shelf 

worn,"   you  will  make  a  horizontal  reduction  of  25%   on  same  and  offer  them  at  "special 

sale."     Close  them  all  out  before  the  end  of  the  week. 
O         10.     Post,  prove  cash,  verify  your  work  and  ask  for  O.  K. 

TUESDAY'S  BUSINESS 
O  1.     Attend  \.o  yoxn  roaJl,  express,  and  freight. 

O  2.     Fill  all  orders,  ship  goods,  bill  same  and  make  proper  entries. 

O  3.      Write  to  the  Com'l  Exchange  stating  that  certain  goods  received  in  latest  invoice  are 

not  up  to  grade  and  that  you  will  return  same  unless  they  will  make  you  a  25%  reduction  in 

price.     Await  their  answer  and  act  accordingly. 

O  4.     B^iy  Coal  for  office  use  and  sell  a  part  of  that  now  on  hand  to  Com'l  Exchange  for 

$10  per  ton. 

O  5.     Allow  a    10%    rebate  on  last  bill  sold  yesterday,  on  account   of  inferior  quality  of 

goods.     Give  Credit  Mem. 

O  6.     The  Transportation  Company  having  made  an  overcharge  on  freight,  hand  you  a  re- 

bate of  $5.75  in  cash.     Show  this  item  to  the  Agent,  who  will  give  you  check. 

O  7.     Pay  $300  on  account  of  show  cases  and  shelving  bought  last  week. 

O  8.     Make  2  shipments  of  Produce  to  be  sold  on  commission.     Receive  2  consignments, 

ditto.     Pay  freight. 

O  9.     Make  sales  from  your  own  Mdse.  and  also  from  consignments.     Render  an  account 

sales  when  a  consignment  is  all  sold. 
O         10.     Collect  dividends  on  stocks  and  interest  on  notes,  also  pay  interest  due. 

0^*lf  you  have  completed  the  above  close  the  day's  work  as  usual  and  present  your  books 
for  O.  K. 


O' 

1 

o 

2 

o 

3 

o 

4 

o 

5 

128  BUSINESS  PRACTICE  BOOKKEEPING 

WEDNESDAY'S   BUSINESS 

Atte7id  to  mail,  express,  and  freight,  and  answer  all  letters. 
Fill  orders,  ship  goods,  and  make  proper  entries. 
Receive  checks  from  3  or  more  customers,  giving  discounts. 
Make  remittances  by  bank  drafts,  less  discounts. 

Pay  for  packing  boxes,  wrapping  paper,  twine,  and  cord,  for  shipping  room,  $34.50. 
Note — Charge  to  Shipping  Room  account. 

O  6.     The  Com' I  Exchange  notifies  you  that  you  are  entitled  to  a  rebate  of  $24.60  on  last 

week's  purchases  and  hands  you  a  Mem.  of  Credit  for  same. 

O  7.     Sell  three,  bills  for  notes  or  acceptances,  and  receive  notes  in  settlement  of  three  of 

your  longest  standing  accounts. 

O  8.     Discount  at  bank  two  notes  and  have  proceeds  credited  in  your  pass  book. 

O  9.     Admit  another  partner  in  the  business  by  selling  him  a  one-third  interest  in  yo7(r 

share  of  the  business  for  cash.  You  and  your  old  partner  are  to  receive  10  %  on  the  sales  to 
date  for  your  share  of  the  profits.  Credit  same  to  your  private  accounts.  Draw  up  new  Ar- 
ticles of  Co-partnership. 

O  10.  An  old  customer  having  failed,  he  can  pay  only  80  cents  on  the  dollar.  Having 
guaranteed  the  account,  you  must  personally  bear  the  whole  loss. 

ftdP  Close  the  day's  work  as  usual  and  ask  for  O.K. 

THURSDAY'S  BUSINESS 

O  1-     After  attending  to  mail,  express,  and  freight,  send  out  Statements  of  Account  to  all 

customers  as  directed  last  week. 
O  2.     Ship,  bill,  and  enter  all  sales  per  orders  received.     Discount  for  cash  according  to 

"  terms''  or  invoices. 
O  3.     Telegraph  for  a  line  of  five  different  kinds  of  Mdse.  by  "  day  letter."     Pay  for  tele- 

gram in  cash. 
O  4.      You  will  execute  three  business  transactions  that  you  find  necessary  in  the  conduct  of 

your  business.     Show  teacher  what  you  have  done. 
O  5.     Pay  $300  on  note  given  for  Motor  Car,  and  the  balance  due  on  Real  Estate  note  if 

not  already  paid. 
O  6.     Close  out  all  consignments  on  hand  and  render  Account  Sales  of  the  same. 

O  7.     Your  latest  parttier  buys  out  your  first  partner  hy  giving  him  a  check  equal   to  his 

present  worth  at  the  time  the  last  balance  sheet  was  made  out,   plus  2    %  of  the  sales  to  date. 

Make  proper  entry  and  show  to  teacher. 
O  8.     Pay  repairs  on  Motor  Car,  $8.50,  and  on  Safe  Lock  $1.50,  in  cash.     Sell  50  gallons 

Gasoline  @  20^,  for  cash. 

O  9.     Look  over  your  2t.ccovLnX.s  and  ascertain  if  there  is  not  something  you  can  do  to  get 

things  in  shape  for  tomorrow's  closing,  as  that  is  your  last  day  in  the  wholesale  office. 
O         10.     Post,  prove  cash,  and  verify  all  accounts.     Present  your  books  for  O.  K. 

FRIDAY'S   BUSINESS 
Collection  Day 

O  1.     Today  you  will  devote  to  closing  up  the  Wholesale  business.     It  is  not  necessary  to 

close  all  accounts,  only  those  that  are  closed  without  delay. 

O  2.     ^//<?«df  to  the  usual  mail,   express,  and  freight,  and  answer  letters,  acknowledge  re- 

ceipts, etc. 

O  3.     Fill  all  orders  early.     Do  not  forget   to   make  all   entries    necessary.     Ship   goods 

promptly. 

O  4.     Pay  the  following:     Traveling  Agent's  salary,  $50;  Clerk's  salary,  two  weeks,    $40; 

Insurance,  $17.50;  Sundries  expenses  per  Expense  Book,  $11.75. 

O  5.     Pay  only  accounts  that  are  due.     Collect  ditto. 

J)  6.     Discou7it,  at  bank,  all  notes  that  have  30  days  or  more  yet  to  run.     Collect  on  notes 

due  with  interest. 

O  7.     Settle  all  petty  accounts  in  cash. 


BUSINESS  PRACTICE  BOOKEEPING  129 

O  8      Take  a  thoroup^h  inventory   of  Mdse.,  Furniture  and  Fixtures,  Chattels,  Notes  Rec, 

Notes  Pay.,  Expense,  Etc.,,  and  have  the  same  approved  by  your  teacher. 

O  9.     Post,  prove  cash,  take  balances,  and  verify  the  personal  ac::ounts.     Make  out  a  com- 

plete Trading  State)nent  and  a  Profit  and  Loss  Statement  as  illustrated  on  pages  120  and  121, 
and  copy  same  in  Balance  Book  for  O.  K 

O         10-     Make  out  a  Balance  Sheet  and  close  the  Ledgers.     Render  a  formal  financial  state- 
ment showing  the  condition  of  business  at  this  time. 

|p#  If  you  have  completed  the  above,  present  your  books  and  statements  for  O.  K.,  and  pre- 
pare to  enter  the  Commission  Office. 


130  BUSINESS  PRACTICE  BOOKKEEPING 

Questions  for  Review 

1.  What  subjects  are  embraced  in  this  work  under  the  head  of  "  Higher  Accounting?  " 

2.  What  qualifications  are  necessary  to  every  successful  businessman  and  every  efiicient 
accountant  ? 

3.  Define  Order.     Dispatch.     Integrity.     Ability. 

4.  How  does  wholesale  accounting  differ  from  ordinary  retail  bookkeeping? 

5.  Classify  the  records  of  wholesale  accounting. 

6.  Describe  the  loose  /^o/" system  of  recording  accounts. 

7 .  What  are  Sales  Files?  Purchase  Piles?  Extension  Sheets? 

8.  What  are  the  duties  of  the  billing  clerk,  of  the  stock  clerk,  and  of  the  bookkeeper  in  a 
large  wholesale  house? 

9.  How  are  postings  made  from  the  Invoice  File  and  from  the  Sales  File? 

10.  What  class  of  entries  are  made  in  the  Wholesale  Journal  ? 

11.  Describe  the  Wholesale  Cash  Book. 

12.  What  are  cojitra  accounts  and  how  are  they  treated? 

13.  Describe  the  method  of  posting  from  the  Wholesale  Cash  Book. 

14.  What  three  forms  of  Wholesale  Ledgers  are  described? 

15.  What  accounts  are  usually  found  in  the  General  Ledger? 

16.  What  accounts  are  found  in  the  Personal    (Sales  and  Purchase)    Ledger? 

17.  Classify  the  accounts  of  wholesale  bookkeeping. 

18.  Describe  in  full  the  manner  of  posting  to  the  different  Ledgers  of  Wholesaling. 

19.  Describe  fully  the  Skeleton  Ledger  Proof  Sheet. 

20.  Explain   the  method  of  using  the    "Red  and  Black"  system  of  showing  resources  and 
liabilities. 

21.  What  books  are  used  in  Wholesale  and  Jobbing? 

22.  What  are  "  Trading  Statements"  and  what  do  they  show? 

23.  Describe  the  "Profit  and  Loss  Statement"  and  explain  its  purpose. 

24.  What  are  the  ''terms''  specified  in  wholesale? 

25.  Write  out  from  memory  the  scale  of  charges  required  in  the  wholesale  oJQEice. 


The  Commission  Ofl&ce 


TO    THB    STUDENT 

463.  The  Commission  OfRce  exemplifies  another  step  in  Higher  Accounting  and 
you  should  take  much  pains  to  make  it  represent  your  highest  ideals  of  good  business  practice. 

464.  In  this  Office  you  represent  both  the  business  manager  and  bookkeeper,  therefore 
you  will  have  much  to  attend  to  in  keeping  the  daily  routine  of  work  up-to-date. 

465.  Do  not  try  to  do  more  each  day  than  the  Guide  indicates.  Each  day's  work  is  al- 
ready laid  out  and  is  sufficient  to  keep  a  diligent  student  busy.  Should  yon  have  any  extra  time, 
look  over  the  next  day's  work. 

466.  Requirements:     The  following  are  the  requirements  of  the  Commission  Office: 

1.  The  student  must  satisfactorily  conduct  the  Commission  Office  for  at  least  ^hree 
weeks. 

2.  He  must  receive  a  record  of  three  satisfactory  inspections  of  his  books  and  ofiice. 

3.  He  must  make  at  least  three  shipments  and  receive  three  consignments  per  day 
for  the  first  two  weeks,  and  two  per  day  for  the  third  week. 

4.  He  must  render  Account  Sales  for  all  consignments  sold  and  receive  Account  Sales 
of  all  shipments  sent  out,  and  make  proper  entries  for  same. 

5.  He  must  follow  his  Guide  to  the  letter.     Any  liberties  allowed  the  student  as 
to  the  .conduct  of  the  business  will  be  noted  in  the  Guide  or  granted  by  the  teacher. 

6.  He  must  get  an  O.  K.  at  the  close  of  each  and  every  day's  work  before  pro- 
ceeding further.     No  deviation,  whatever,  from  this  rule. 

467.  Charges:  The  charges  for  freight,  insurance,  guaranty,  storage,  commission,  etc., 
will  be  the  same  as  noted  in  the  Wholesale  Department. 

468.  Xerms:  The  terms  of  sale,  interest,  discount,  collection,  and  exchange,  and  the 
method  of  computing  time  are  the  same  as  in  the  Wholesale  Department. 

469.  All  Shipments  and  Consignments  must  pass  through  the  freight  office,  and  freight 
charges  must  be  paid  on  every  shipment  either  by  the  shipper  or  by  the  receiver. 

470.  Make  all  J^ntries  as  business  is  done.  Post,  prove  cash,  and  make  out  daily 
statement  at  the  close  of  each  day's  work.  Verify  your  Personal,  Consignment,  and  Shipment 
Ledgers,  every  Friday.     Keep  dates  exact,  check  perfectly,  and  study  your  text  book  and  guides. 

471.  All  Sales  must  contain  not  less  than  three  different  kinds  of  goods.  Keep  busy.  In 
the  Commission  Business  you  are  to  demonstrate  whether  or  not  you  are  capable  of  holding  a  re- 
sponsible position.     A  failure  here  is  the  worst  kind  of  a  failure.     Study,  study;  work,  work. 


132  BUSINESS  PRACTICE  BOOKKEEPING 

Commission  Accounting 

472.  A  Commission  Merchant  is  one  who  buys,  sells,  invests  or  collects  for  another 
for  a  compensation  called  commission. 

473.  Commission  is  the  compensation  charged  by  a  commission  merchant  or  agent  for 
buying,  selling,  investing  or  collecting  for  another,  and  is  usually  computed  as  a  certain  rate  per 
'cent,  of  the  amount  bought,  sold,  invested,  or  collected. 

474.  A  Shipment  is  the  merchandise  sent  to  a  commission  merchant  to  be  sold. 

475.  A  Consignment  is  the  merchandise  received  by  a  commission  merchant  to  be  sold. 

476.  The  Consignor  or  Shipper  is  the  one  who  ships  or  sends  the  shipment. 

477.  The  Consignee  is  the  one  who  receives  the  consignment  to  be  sold. 

478.  Freight,  F)xpress,  and  Dray  age  are  the  charges  paid  for  the  transportation  of 
goods . 

479.  Insurance  is  the  amount  charged  for  indemnification  in  case  of  a  loss  by  fire  or 
other  casualty. 

480.  Storage  is  a  charge  made  by  warehouses  for  the  safe  keeping  or  storing  of  goods. 

481.  Guaranty  is  a  charge  to  insure  against  loss  through  bad  debts.  It  is  charged  by 
commission  merchants  on  sales  on  account. 

482.  A  Shipment  Invoice  is  a  list  of  goods  forwarded  to  be  sold  on  commission.  See 
form  page  133. 

483.  An  Account  Sales,  see  form,  page  74,  is  a  statement  rendered  by  a  commission 
merchant  to  the  consignor,  and  contains: 

1.  A  list  of  goods  received. 

2.  An  itemized  list  of  the  goods  sold  with  dates  of  sales,  prices,  extensions,  and 
total  sales . 

3.  The  charges  in  detail,  including;   freight,  dray  age,  insurance,  storage,  guaranty, 
and  commission. 

4.  The  Net  Proceeds. 

5.  A  communication  stating  the  manner  of  remittance  or  of   making  the  credits. 

6.  The  Signature  of  the  commission  merchant. 

484.  The  T^otal  Sales  is  the  sum  received  for  the  goods  before  any  charges  have  been 
deducted. 

485.  The  Net  Proceeds  is  the  sum  left  after  deducting  all  charges  including  the  com- 
mission. 

486.  An  Account  Purchase  is  an  itemized  statement  of  goods  purchased  by  a  commis- 
sion merchant,  with  freight,  commission  and  other  charges.     See  form,  page  74. 

487.  The  Mntire  Cost  is  the  total  amount,  and  includes  first  cost  of  goods  and  all 
charges. 

488.  An  Investment  is  a  sum  received  by  or  sent  to  an  agent  to  be  invested. 

Note — An  investment  received  from.  Mr.  Doe  is  "  titled"  ''Doe's  Itvoestment,  No.  t  ;'*  if  sent  to  Mr.  Doe 
it  receives  the  title,  " In.'oestment  Doe  No.  I." 

489.  The  ^or^ing  Outfit  for  the  commission  merchant  in  addition  to  that  used  in  the 
wholesale  office  consists  of  the  following:  Shipping  Invoices,  Account  Sales,  Account  Purchases, 
Collection  Reports,  Consignment  Stalls  or  Envelopes,  together  with  the  books  used  especially  in 
this  office. 

490.  The  Books  Used  are  the  Receiving  Pile  or  Book,  Shipment  File  or  Book,  Collectio?i 
Record,  Investment  Book,  Journal,  Commission  Cash  Book,  Purchase  Invoice  File,  Sales  hivoice 
File,  Co7isignment  Ledger,  Shipment  Ledger,  Investment  Ledger,  Personal  Ledger  and  General 
Ledger. 


BUSINESS    PRACTICE    BOOKKEEPING 


133 


491.  The  ZfOOse  heaf  system  of  accounts  is  used  as  far  as  practicable,  and  the  student 
should  employ  whatever  knowledge  of  this  method  he  has  already  learned,  to  the  accounts  of  the 
Commission  Office, 

492.  Consignment  Envelopes:  The  envelopes  or  stalls  containing  consignments  should 
be  nu7nbered  consecutively  and  the  merchandise  removed  only  when  making  sales  from  the 
consignments. 

The  Consignment  File  or  Receiving  Book 

493.  In  the  Consignment  Pile  are  placed  all  the  Shipment  Invoices  received.  Exteytsion 
Sheets,  with  money  columns,  to  which  are  extended  the  freight,  drayage,  and  other  charges  paid, 
together  with  any  moneys  advanced  on  the  consignments.  When  a  bo'ok  is  used  for  this  purpose 
it  is  called  a  Receiving  Book. 

Note — When  standard  forms  of  Shipment  Invoices  are  not  received  with  consignments,  copies  to  fit  the 
file  should  be  used. 

494.  ^very  Consignment  receives  a  number  by  which  it  is  designated,  and  this  number 
is  entered  on  the  extension  sheet  as  a  ready  guide  to  posting. 

FORM  OF  SHIPMFNT  INVOICF  AND  CONSIGNMFNT  FII,F 


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M.LlVl]^€rSTO]^  &  CO, 

=^„.,-. .  .^  _  WHOLESALE  GRDCEHS/^   ""*  ^ '" 

5EEDS,PR0DUCE  &  PROVISIONS. 

I»Al>irCAH,15Y.^ 


ALL  QUOTATIONS  Sl/BJCCT  TO  MARKET  CHAN6C  WITHOUT  NOTICE. 


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Dtar  Sir: 


IVe  ship  you  loday  Ihe  following  goods  lo  be  sold  on  our  account  and  risk.       If  convenient  to  you,  *■«  mil 

consider  it  a  special  favor  if  you  will  make  us  a  cash   advancement  of  f./JL£L^ on  the  same. 

Very  truly  yours. 


v^  ^A^/f^'^M. 


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Note — The  number  79  on  the  above  is  Livingston  &  Co.'s  shipment  number.     The  number  47  is  the  con- 
signment number  placed  there  by  A.  B.  Chapman's  receiving  clerk. 

495.  The    Title  of  a  consignment  in  a  Ledger  should  always  contain  dot^  the   names  of* 
the  shipper  Qindi  the.  number  0/ the  shipment;  2iS,    "John  Doe's   Co7isignment,  No.  10,''  or  "  G.  W. 
Brown's  Cofisignmeiit  No.  15." 

496.  IPost  from  the  Consignment  File  or  Receiving  Book  by  debiting  each  consignment  in 
the  Consignment  Ledger  with  the  freight  charges  paid  and  with  any  cash  advanced  on  the  same, 
and  credit  cash  in  the  Cash  Book  for  the  footing  of  the  money  columns. 


134 


BUSINESS  PRACTICE  BOOKKEEPING 


Commission  Sales  Book  or  Sales  Invoice  File 

497.  The  Sales  Book  or  Sa/es  Invoice  File  of  Commission  does  not  differ  very  materially 
from  those  already  described.  Columns  for  extensions ,  consignment  sales,  and  merchandise  sales 
are  necessary  in  order  to  segregate  the  items  for  posting. 

498.  Sales  may  consist  of  goods  taken  from  07ie  consignment,  from  two  or  m^re  consign- 
ments, from  merchandise  only,  or  from  doth  consignments  and  merchandise. 

499.  When  a  Sales  Invoice  JFile  is  used,  it  is  necessary  to  insert  extension  sheets  have 
ing  columns  for  both  cash  and  account  sales. 

FORM  OF  sai<:rs  invoicf  fii,f 


500.  The  Totals  of  each  day's  cash  sales  should  be  brought  forward  as  "  Total  Cash  Con- 
signment Sales,"  "Total  Cash  Mdse.  Sales"  and  entered  in  their  proper  columns  on  the  debit 
side  of  the  Cash  Book. 

591.  Post  the  sales  from  each  individual  consignment  to  the  credit  of  its  account  in  the 
Consignment  Ledger. 

502.  Sales  of  Consignments  or  Mdse.  on  account  should  be  posted  to  the  debit  of  the 
buyer's  account  in  the  Persojial  Ledger. 

The  Shipment  File  or  Book 

503.  The  Shipment  File  or  Book  consists  of  a  pad  of  Shipment  Invoices  with  alternat- 
ing yellow  sheets  for  carbon  copies  of  the  same.  After  the  Shipment  Invoices  are  removed,  ex- 
tensions are  made  on  the  yellow  sheet  as  in  an  ordinary  bill  or  invoice. 

504.  The  Shipment  Invoice  is  sent  to  the  consignee  with  the  goods  to  be  sold  and  the 
carbon  copy  is  filed  with  others  in  the  Shipment  File  having  extension  sheets  with  money  col- 
umns for  ''  prepaid  freighf''  and  for  the  totals  of  each  shipment. 

505.  ^Extensions  on  the  yellow  duplicate  sheets  are  made  at  cost  prices  and  their  totals 
extended  to  the  money  column  of  the  extension  sheets. 


BUSINESS  PRACTICE  BOOKKEEPING 


135 


506.  Mach  Shipment  receives  a  7iiimber  by  which  it  is  designated,  and  this  number  is 
entered  upon  the  extension  sheet  as  a  guide  to  posting. 

507.  The  Title  of  a  Shipment  in  the  Ledger  should  always  combine  doik  the  name  of  the 
cons/g^/ice  and  the  number  of  the  shipment;  as,  Ship7ne7it  John  Doe  No.  10, ''  or  "  Shipment  G.  W. 
Bro'wn  No.  15.'' 

FORM    OF    SHIPPING    FII^F    RFCORD    AND    FXTFNSION    SHFFT 


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Note — The  above  represents  the  carbon  copy  of  Shipment  No.  79  with  six  entries  on  the  Extension 


508.  Post  by  debiti7ig  each  Shipment  in  the  Shipment  Ledger  with  its  cost  value  including 
prepaid  freight,  draj^age,  or  other  incidentals  charges,  and  by  credithig  Cash  and  Mdse.  for  their 
respective  footings  of  the  extension  columns. 


136 


B17S/NESS    PRACTICE    BOOKKEEPING 

Commission  Cash  Book  Debits 


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509,  The  Commission  Cash  Book  is  provided  with  twelve  money  columnSy  six  on  the 
debit  and  six  on  the  credit  side  of  the  book.     It  is  sometimes  called  the  Twelve  Column  Cash  Book. 

510,  In  addition  to  the  four  columns  in  the  debit oi  the  Wholesale  Cash  Book,  two  more  are 
added,  one  for  cash  received  on  shipments  account,  and  one  for  consignment  cash  sales  for  the  day. 

511.  On  the  Credit  side  two  columns  are  also  added,  one  for  remittances  on  consign- 
ments sold,  and  one  for  Commission.     The  Expense  column  is  changed  to  Insurance  and  Storage. 

512.  The  seven  columns  in  the  Wholesale  Cash  Book  serve  the  same  purpose  as  in  that 
book,  the  totals  of  Dis. ,  Com.,  Ins. ,  and  Storage  being  transferred  to  the  opposite  side  before  posting. 


BUSINESS  PRACTICE   BOOKKEEPING 

Commission  Cash  Book  Credits 


137 


TiTLc    AND    Explanation 


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513.  The  ^otal  JP'ootings  of  the  special  columns  are  forwarded  to  the  general  columns 
and  the  book  balanced  as  usual. 

514.  Post  all  items  nof  previously  postedixova.  the  books  or  files  of  original  entry  to  their 
respective  ledger  accounts.  Be  sure  to  post  Contra  Discount,  Commission,  Insurance,  and  Storage 
after  transferring  them  to  the  opposite  page  of  the  Cash  Book. 

Note — For  convenience,  the  Rent,  Stora.ge,  Insurance,  and  Guaranty  will  all  be  posted  to  one  account 
titled,  "Rent,  Storage,  Insurance,  and  Guaranty  account  "  in  the  Ledger. 

Note — Rent  paid  is  offset  by  the  storage  collected,  insurance  paid  is  offset  by  the  insurance  received, 
and  losses  from  bad  debts  is  made  up  wholly  or  in  part  by  the  guaranty  charged. 


138  BUSINESS  PRACTICE    BOOKKEEPING 

COMMISSION    CASH    BOOK    M:EM0RANDA 

Note — The  following  memoranda  is  fully  illustrated  in  the  Commisssion  Cash  Book.  The  student  will 
copy  the  same  in  his  Cash  Book  and  study  each  entry  carefully.  This  work  must  be  presented  to  the  teacher 
for  inspection  before  proceeding  with  the  Actual  Business  Practice. 

Augtist  1,  Cash  Receipts 
O  1-     A.  B.  Chapman  &  Co.  resumed  busitiess  with  cash  on  hand,  $5000. 

O  2.     James  Harvey  paid  us  $480   less  discount  of  2%   to   balance  account.     Discount, 

$9.60;  Net,  $470.40. 
O  3.     D.  Stewart  paid  his  note,  $500,  and  Int.,  $87.50,  due  today,  in  cash. 

O  4.     A.  J.Fuschiapaid  for  Sales  Inv.  #36,  $320,  discount,  2%.    Dis.  $6.40;  Net,$313.60. 

O  5.     Received  from  E.  J.  Hill  an  account  sales  of  Ship'tNo.  1,  with  check  to  cover,  $421.50. 

O  6.     The  Cash  Consignment  Sales  today  as  shown  by  the  Sales  Invoice  File  are  $1040. 

Q  7.     The  Cash  Mdse.  Sales  today  were  $1241.50. 

Augiist  1,  Cash  Payments 
O  8.     Paid  rent  on  store  building  for  August,  $150. 

O  9.     Bo't  Office  Safe  for  cash,  $320. 

O         30.     Remitted  Commercial  Exchange  by  check  $490.     Being  entitled  to  2 %  discount  this 

amount  covers  a  face  value  of  $500;  discount  $10, 
O         11.     Rendered  an  Account  Sales  of  Hall's  Con.  #5  and  remitted  cash  $228.    Com.  $12. 
O         12.     Paid  premium  on  blanket  insurance  policy  for  warehouse  $100. 
O         13.     Paid  Stationery  bill  in  cash,  $12.50. 
0         14.     Paid  freight  bills  in  cash,  $38.45. 

O         15.     Rendered  an  Account  Sales  of  Calvin   Little's  Con,    ;5^6,   and  remitted  cash,    $282; 
Com.  $15;  Insurance  and  Storage,  $3. 

Aiigtist  2,  Cash  Receipts 
O         16.     Burgess  Bros,  gave  us  their  check  for  Inv.  ;^17  less  dis.  $4.70.     Cash  rec'd,  $230.30. 
O         17.     Rec'd  of  E.  V.  Grant  on  acct.,  cash,  $150. 

O         18.     Rec'd  of  I.  J.  King  his  check  for  $174.25,  balance  due  on  Ship't  No.  2. 
O         19.     Rec'd  of  I.  Rambo  his  check  for  $218.40,  proceeds  of  Shipt.  No.  3. 
O         20.     Cash  Consignment  Sales  for  the  day  $924.35. 
O         21.     Mdse.  Cash  Sales  for  the  day,  $772.25. 

August  2,  Cash  Payments 
O         22.     Paid  E-  Goodyear  for  Inv.  ;^27.     Discount,  $3.75;  Net,  $182.75. 
O         23.     Paid  for  Invoice  #48  by  check,  $324.50. 
O         24.     Rendered  an  Account  Sales  of  Hall's  Con.  # 7  and  remitted  proceeds  in  cash.      Net 

Proceeds,  $593.75;  Commission,  $25;  Insurance  and  Storage,  $6.25. 
O         25.     The  expenses  per  Expe?ise  Book  paid  in  cash,  $11.25. 

O         26.     Paid  note  in  favor  of  C.  R.  Sweet  and  interest  by  check.     Face,  $200;     int.,  $12.50. 
O         27.     Remitted  Taylor  &  Co.,  of  Eos  Angeles,  our  check  for  $300  to  be  invested  in  Oranges 

after  deducting  their  commission, 
O         28.     Paid  M.  N.  Eong  for  Inv.  #21  less  discount  $12.25.     Amt.  remitted,  $232.75. 

Augtist  3,  Cash  Receipts 
O         29.     Received  check  for  $12.25,  allowance  of  cash  rebate  on  Invoice  #21  on  account  of 

damaged  goods. 
O         30.     B.   F.   Hall  prepaid  his  note  due  in  one  year.      Face  of  note  $300;  discount,  $15. 
O         31,     Received  N.  Y.  draft  of  W.  F.  Wilson  for  $300  to  be  invested  in  California  fruits  per 
his  memorandum,  after  deducting  our  commission. 

Rec'd  an  advance  payment  on  our  Shipment  to  O.  Jones,  No.  4,  Detroit,  $100. 
The  Consignment  Cash  Sales  today  were  $1216.40. 
The  Mdse.  Cash  Sales  today  we're  $1472.75. 

Augtist  3,  Cash  Payments 
Rec'd  of  D.   Stewart  Consignment  No.  8  of  produce  to  be  sold  on  his  account   and 
risk,  and  advanced  $100  cash  on  the  same. 

Prepaid  our  note  in  favor  of  W.  H.  Ham.     Discount,  $7.60;  Proceeds,  $192.40. 

Remitted  Com'l  Exchange  by  N.  Y.  draft,  $1000.     Exchange,  $2.50. 

Rendered  an  account  sales  of  Gill's  Con.  #9  and  remitted  cash  $396.90;  Commission, 

&  Storage,  $2.10. 

Sent  I.  J.  King  our  check  for  $7.45,  overcharge  on  Invoice  #41, 

Freight  paid  per  Shipment  Book,  $2,45;  and  from  Receiving  Book,  $22,30, 


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40, 

BUSINESS    PRACTICE    BOOKKEEPING  139 

The  Commission  Journal 

515.  The  Journal  of  Commission  is  the  same  as  the  one  described  in  the  Wholesale  De- 
partment and  is  used  in  a  similar  manner. 

516.  The  Journal  Entries  peculiar  to  the  commission  business  generally  relate  to  con- 
signments sold  on  account  and  so  reported  in  the  Account  Sales  rendered. 

517.  The  Consignee  when  rendering  an  Account  Sales  of  a  consignment  sold  on  account, 
should  debit  the  consignment  in  the  Journal  for  the  total  sales  from  that  consignment,  less  freight 
charges  paid  and  cash  advanced.  He  should  credit  commission,  storage,  insurance,  and  guaranty 
with  their  respective  charges,  and  the  consignor  with  the  Net  Proceeds. 

518.  The    Consignor  when  receiving  an  Account  Sales  of  a  shipment  sold  on  account, 

should  credit  the  shipment  and  debit  the  consignee  with  the  Net  Proceeds  of  the  sale. 

Illustration: 

Student  rendered  an  account  sales  of  Burt's  Con.  No.  1.     Sales,  |400;   Freight  paid  in  cash,  $4;   Com., 
|20;  Storage,  |2;  Ins.,  $4;  Guaranty,  |8;  Net  Proceeds,  |362. 

Student's  Journa.1  Entry:  Burt's  Con.  No.l,  Dr.  $396,  To  Credits  as  follows:  Com.,  $20;  Storage,  $2;  Ins., 
|4;  Guar.,  $8;  A.  Burt,  $362. 

hurt's  Journa.1  Entry:     Student  Dr.  $362,  to  Shipment  Student  No.  1, 


The  I/edgers  of  Commission 

519.  The  l/Cdgers  used  in  this  system  of  Commission  Accounting  are:  Consignment 
Ledger^  Shipment  Ledger,  Personal  Ledger,  and  General  Ledger .  An  Investment  Ledger  may  also 
be  used. 

520.  To  the  Consignment  I^edger  are  posted  the  debits  and  credits  of  all  consignment 
accounts,  including /";r/^///,  drayage,  commission,  and  other  charges. 

521.  To  the  Shipment  J^edger  are  posted  debits  andcredits  of  all  shipments,  either  from 
the  Shipme?it  Invoice  Pile,  Cash  Book,  ox  Jotirnal. 

522.  The  Personal  I/edger  combines  the  Purchase  Ledger  and  the  Sales  Ledger  of  the 
Wholesale  Ofhce.  The  segregation  of  the  Accounts  Receivable  from  the  Accounts  Payable  will 
be  made  in  this  ledger. 

523.  The  General  Xed^er contains,  in  addition  to  th.^  general  accounts  d^xedAy  discussed, 
summaries  or  totals  from  the  Consignm.ent  Ledger,  Shipment  Ledger,  and  Personal  Ledger. 

524.  The  Consig7iment,  Shipment,  and  Personal  Accounts  may  be  verified  each  day  the 
same  as  in  Wholesale  Accounting. 

525.  The  General  Accounts  of  the  General  Ledger  are  identical  with  those  used  in  the 
wholesale  office. 

526.  Special  Accounts  are  those  accounts  in  the  General  Ledger  which  belong  especially 
to  the  commission  business,  and  are  as  follows: 

1.  The  Commission  Account  which  contains  a  summary  of  all  commission  charges. 

2.  The  Re7it,  Insurance,   Storage,  and  Guaranty  Account  containing  a  summary  of 
those  charges. 

3.  The   Consignments  Open  Account  which  is  a  summary  of  all  the  open  consign- 
ment accounts  in  the  Consignment  Ledger. 

4.  The  Shipme7its  Open  Account  containing  a  summary  of  all  the  open  shipment 
accounts  in  the  Shipment  Ledger. 

5.  The  Shipments    Closed  Account  which  contains  a  summary  of  all    the  losses  and 
gains  from  the  closed  shipment  accounts  in  the  Ship^nent  Ledger. 

527.  The  Consignments  Open  and  Shipments  Open  accounts  are  treated  the  same  as 
the  Accounts  Receivable  and  Accounts  Payable  accounts  in  the  wholesale  office. 

528.  The  Rent,  Commission,  Instirance ,  Storage,  Guaranty ,  and  Skipm,ents  Closed  accounts 
show  a  loss  or  a  gain  and  are  closed  into  the  Loss  afid  Gain  Account. 


140  BUSINESS    PRACTICE    BOOKKEEPING 

GUIDE  NO.  12,   Commission 

First    Week 
M^  Arrange  your  desk,   books,   papers,    consignment  stalls,  and  other  paraphernalia  in  a 
systematic  manner,  having  a  place  for  everything  and  everything  in  its  place.     Disorderly  desks 
and  unsystematic  work  will  prevent  you  from  graduation. 

Note — "When  the  business  of  each  item  is  completed  the  student  will  place  a  check  mark  (V)  in  the  small 
circle  at  the  left  of  the  number  of  the  item.    Students  are  held  strictly  accountable  for  any  deviation  from  this  rule. 

MONDAY'S  BUSINESS 

O  1-     Ope7t  your  books  ■w\\h  2i  Yorifi&d  statement  of  your  resotirces  2iu6.  liabilities,  including 

all  Interest  Receivable  and  Interest  Payable  on  notes  and  accounts.     Get  your  teacher's  O.  K. 
before  proceeding  further. 
O  2.     Do  not  pay  rent  this  week.     It  will  be  a  liability  inventory  in  your   next  Balance 

Sheet.     Pay  for  good  will  $500;  advertising  $25.     Buy  stationery  on  account. 
O  3.     Engage  an  agent  to  solicit  business.     Advance  him  $100  expense  money.     Write 

copy  for  business  card  with  his  name  as  a  representative  of  the  firm,  and  hand  to  teacher. 
O  4.      Order  by  letter  a  large  bill  of  Mdse.   from  the  Commercial  Exchange.     Indicate  in 

this  letter  what  you  propose  doing  and  state  that  any  favors  they  may  extend  to  you  will  be 
most  kindly  appreciated.     Write  a  display  ad.  announcing  your  opening.     Get  it  O.  K'd. 
O  5.     Pay  printer's  bill, $10. 50.     Get  a  receipt.     Buy  office  furniture,  three  kinds,  for  cash. 

O  6.     Make  three  shipments,  not  over  $300  each,   to  different  parties.     Prepay  freight  on 

No.  1;  ask  an  advance  of  $100  cash  on  No.  2. 

J^I^^Send  shipments  only  to  students  who  have  passed  Set  V. 
O  7.     ►St'/zaV  three  consignments.     Pay  freight  on  all  but  one,  which  should  be  prepaid  by 

the  shipper.     Advance  $125  cash  on  No.  1.     (Consignment  File  and  C.  B.) 

Sell  sovao.  of  your  own  Mdse.  for  cash.     Buy  a  spot  cash  bill  of  some  student.  C.  B. 

Sell  some  of  your  own  Mdse.  on  account,  5  ds.     Buy  ditto. 

Post,  take  a  daily  statement,  and  prove  cash.     Do  not  balance  and  rule.      Get  O.  K. 

TUESDAY'S  BUSINESS 
Receive  your  mail,  freight,  and  express.     Pay  charges. 

Answer  all  letters  and  telegrams.     Acknowledge  receipt  of  all  moneys,  and  make 
proper  entry  in  the  Cash  Book. 
O  3.     Fill  all  orders  for  Mdse.     Telegraph  to  Commercial  Exchange  for  three  consignments 

of  semi-tropic  fruit — oranges,  lemons,  and  bananas — to  be  sold  on  commission. 
O  4.     Send  three  shipments  of  prunes,   butter,   and  eggs  to  various   parties  to  be  sold  on 

your  account  and  risk.     Prepay  freight  on  one,  and  ask  advance  of  $50  an  another. 
O  5.     Receive  irora.  Commercial  Exchange,  S.  F.,  by  express,  the  consignments  of  oranges, 

lemons,  etc.,  ordered  by  telegraph.     Pay  freight. 
O  6.     Receive  from  some  wholesaler  a  consignment  of  goods  to  be  sold  on  commission.  The 

freight  charges  should  be  prepaid.     Notify  wholesaler  to  prepay  freight. 
O  7.     ►S^// consignment  No.  1  for  cash.     Post,  and  render  an  Account  Sales  of  the  same. 

(The  Account  Sales  should  always  be  taken  from  the  ledger  account.) 
O  8.     a.  Sell  posi  of  consignment  No.  2,  and  some  of  your  own  Mdse.  for  cash. 

b.  Sell  from  two  different  consignments  on  account,  5  ds. 

c.  Sell  the  remainder  of  consignment  No.  2,  and  some  of  your  own  Mdse.  for  note  at 
3  ds.,  with  interest.     Render  an  Account  Sales  of  No.  2. 

O  9.     Remit  cash  on  account  of  some  consignment  not  wholly  sold  out. 

O         10.     Receive  Account    Sales  of  shipments  sold  for  cash,  and  make  proper  entries.  C.  B. 

Post,  prove  cash,  and  take  your  daily  statement.     Get  O.  K. 

WEDNESDAY'S   BUSINESS 
O  1-     i?^^m'<?  your  mail,  freight,  and  express.     Pay  charges. 

O  2.     Answer  2:^  correspondence,  receipt  bills,  etc.,  make  remittances  and  enter  same. 

O  2).     a.  Send  $200  by  bank  draft  to  some  student  and  instruct  him  to  invest  the  proceeds 

in  bananas  after  deducting  his  commission. 

b.  Receive  $330  from  some  student  to  invest  in  produce,  after  deducting  $5  wharfage, 

and  commission  at  5  per  cent.     Buy  goods  and  send  by  early  freight  with  Account  Purchase. 
O  4.     Make  three  or  more  shipments,  of  not  less  than  three  items  each,  to  different  students, 

to  be  sold  on  your  account  and  risk.     Ask  an  advance  on  two,  and  prepay  freight  on  one. 


0 

8. 

0 

9. 

10. 

0 

1. 

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2. 

BUSINESS  PRACTICE  BOOKKEEPING  141 

O  5-     Solicit  2in6.  receive  three  or  more  consignments  to  be  sold  on  commission.     Advance 

cash  on  two.     Pay  freight  on  all  but  one,  which  should  be  prepaid. 
O  6.     a.   Se/l  all  of  some  consignment  on  account,  5  ds. 

b.  Sell  part  of  two  consignments  and  some  of  your  own  Mdse.  for  cash. 

c.  Sell  from  three  consignments  for  cash  and  note  at  6  ds.,  with  interest. 

Note — Render  an  Account  Sales  of  every  consignment  closed  out.  When  a  consignment  sold  on  iime 
is  closed  out,  an  Account  Sales  is  rendered  and  the  proceeds  placed  to  the  credit  of  the  consignor,  in  the 
Journal.     Thus:    Consignment  Dr.  to  Consignor  Cr.     (See  lUus.,  p.  139.) 

O  7-     Receive  reiVLrns  from  shipments   and  make  proper  entries.     Pay  some  student  $250 

on  account,  less  $5  discount. 

O  8.     Clea7i  out  three  consignments  and  render  Account  Sales  of  the  same.     Enclose  bank 

draft  for  net  proceeds  of  each.     No  checks.     Collect  cash  on  account  and  give  discount. 

O  9-     Send  a  shipment  of  produce  to  some  commission  merchant  and  direct  him  to  sell  the 

same  and  invest  the  proceeds  in  oranges  and  lemons  after  deducting  freight  charges,  and  com- 
mission for  both  buying  and  selling.     Require  a  complete  statement  of  Sales  and  Purchases. 

O  10-  Receive  a  consignment  of  bananas  from  some  student  to  be  sold  on  commission,  the 
proceeds  to  be  invested  in  butter  after  deducting  charges  and  commission  for  both  selling  and 
buying.     Post,  prove  cash,  and  take  daily  statement.      Get  O.  K. 

THURSDAY'S  BUSINESS 

O  1.     ^i'/^wflf  to  your  mail,  express,  etc.     Buy  stationery,  postage  stamps,  etc. 

O  2.     Render  an  Account  Sales  for  each  invoice  when  entirely  sold  out.     Charge  guaranty 

if  sold  on  account  cr  for  note  guaranteed  by  you. 

O  3.     Make  three  shipments  of  not  less  than  three  items  each.     Ask  an  advance  on  one  and 

prepay  freight  on  one. 

O  4.     Solicit  three  consignments  as  directed  yesterday. 

O  5.     Make  several  sales  for  cash  and  account,  from  consignments  and  your  own  Mdse. 

O  6.     Sell  consignment  in  No.  10  of  yesterday  and  invest  proceeds.     Charge  for  freight, 

drayage,   insurance  and  commission.     Make  full  report  with  Acct.   Sales  and  Acct.  Purchase. 

O  7.     Pay  on  account  by  check,  note,  and  bank  draft  less  discount. 

O  8.     Discount  at  bank  two  notes.    Leave  a  note  at  bank  for  collection.    Collect  on  account 

by  cash,  note,  and  draft,  and  give  discount. 

O  9.     Draw  on  anyone  owing  you  at  three  days  sight  and  leave  at  bank  for  collection. 

Accept  all  time  drafts  drawn  on  you,  and  pay  all  sight  drafts  in  cash. 

O  10.  Render  Account  Sales  for  all  consignments  closed  out.  If  sold  for  cash,  make  re- 
mittance to  balance  account.  If  sold  on  account,  state  the  fact  in  your  Account  Sales,  and 
place  the  net  proceeds  to  credit  of  shipper.  Post,  prove  cash,  and  take  daily  statement.  Get  O.K. 

FRIDAY'S   BUSINESS 
Collection  Day 
Attend  io  your  mail,  express,  etc. 
Exchange  accommodation  notes  with  some  student,  and  borrow  money  at  the  bank. 

a.  Send som&onQ  $600  to  be  invested  in  Mdse.  after  deducting  freight  and  commission. 

b.  Receive  $400  to  be  invested  in  Mdse.  after  deducting  freight  and  commission. 
Telegraph  for  goods  to  be  sent  C.  O.  D,  Ship  a  bill  sold  to  some  student  C.  O.  D. 
Pay  your  traveling  man  $50  for  one  week's  work.     Collect  stall  rent  of  local  cus- 

20.     Pay  $75  for  repairs  on  warehouse.     Rent  and  Repair  acct. 
Sell  from  three  consignments  in  one  bill  for  cash;   also  from  two  consignments  on 
also  from  a  consignment  and  from  your  own  Mdse.  for  cash. 
Close  out  several  consignments  and  render  Account  Sales  of  each. 
Collect  on  account,  and  pay  on  account  all  bills  due.    Accounts  are  due  in  six  days. 
Deposit  cash  in  bank.     Prove  balance  and  rule  cash.     Take  daily  statement.     Post. 
Note — In  posting  from  Cash  Book,  contra.  Discount,  Com.,  Ins.,  etc.,  are  posted  after  being  transferred. 
O         10.     Close  and  rule  all  consignment  accounts  that  balance.     Unclosed  consignment  bal- 
ances are  carried  to  the   "  Consignments  Open"   account,  and  unclosed  shipment  accounts  are 
carried  to  the  "  Shipments  Open"  account  in  the  General  Ledger.     Close  and  rule  all  shipment 
accounts  that  you  have  returns  in  full.     Their  balances  are  carried  to  "  Shipments  Closed"  ac- 
count in  general   ledger.     Take  a  Trial  Balance  and  make  out  a  Balance  Sheet.     Note  that 
Expense  will  have  a  liability  inventory  of  $100  for  unpaid  rent.     Close  General   Ledger  and 
present  books  for  O.  K. 


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account; 

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142  BUSINESS  PRACTICE  BOOKKEEPING 

COMMISSION— Continued 

Second  Week 
MONDAY'S  BUSINESS 

O  1  •     Make  a  Memorandum  of  all  corrections  suggested  by  your  teacher  and  try  to  improve 

your  work.    Put  your  desk  in  order.    Have  a  place  for  everything  and  everything  in  its  place. 
O  2.     Receive  your  mail,  freight,  and  express.     Pay  charges  on  same.     Order  goods,  and 

prepare  for  the  week's  work. 
O  3.     Pay  rent  due  in  cash.     Pay  for  stationery.     Pay  any  sundries  accounts  due,  in  cash. 

O  4.      Write  a  smart  ad  for  the  paper;  give  order  for  its  publication,  style  of  type,  space, 

and  time  to  run.     Take  it  to  your  teacher  and  get  his  O.  K. 

Make  several  shipments;  prepay  freight  on  one  of  them,  and  ask  an  advance  on  one. 
Solicit  and  receive  consignments  as  you  can  dispose  of  the  business. 
^^// from  not  less  than  three  consignments  and  from  your  own  Mdse.  in  several  sales. 
Send  some  commission  merchant  a  stock  of  Cal.  prunes  "On Sale."     Receive  ditto. 
Note — "  On  Sale"  means  that  the  goods  are  to  be  for  sale  on  commission  at  all  times.     As  the  stock  is 
sold  out  it  is  to  be  replenished  by  additional  shipments. 

O  9.     Do  not  forget    your  insurance,  storage,   and   guaranty  as   directed  in  the  General 

Instructions. 
O         10.     Posi^,  prove  cash,  and  take  a  daily  statement.     Get  O.K. 

TUESDAY'S  BUSINESS 
O  1-     /'^c<?/z'<?  your  mail,  freight,  and  express.     Pay  charges. 

O  2.     Answer  all  letters  and  telegrams.     Acknowledge  receipt  of  all  moneys,  and   make 

proper  entry  in  the  Cash  Book. 
O  3.     /v7/ all  orders  for  Mdse.     Telegraph  to  Commercial  Exchange  for  four  consignments 

of  semi-tropic  fruit — oranges,  lemons,  and  bananas — to  be  sold  on  commission. 
O  4.     Send  three  shipments  of  prunes,  butter,  and   eggs  to  various  parties  to  be  sold  on 

your  account  and  risk.     Prepay  freight  on  one,  and  ask  advance  of  $75  on  another. 
O  5.     Receive  from  Commercial  Exchange,  S.  F.,  by  express,  the  consignments  of  oranges, 

lemons,  etc.,  ordered  by  telegraph.     Pay  freight. 
O  6.     Receive  from  some  wholesaler  a  consignment  of  goods  to  be  sold  on  commission.  The 

freight  charges  should  be  prepaid. 
O  7.     Sell  Si  consignment  for  cash.     Cash  Sales  Book.     Post,  and  render  an  Account  Sales 

of  the  same.     (The  Account  Sales  should  always  be  taken  from  the  ledger  account.) 
O  8.     a.  Sell  part  of  consignment,  and  some  of  your  own  Mdse.  for  cash.     C.  S.  File. 

d.  Sell  from  two  different  consignments  on  account,  5  ds. 

c.  Sell  the  remainder  of  a  consignment  and  Mdse.  for  note  at  3  days,  with  interest. 
O  9.     Receive  an  Account  Sales  of  shipment  sold  for  cash,  and  make  proper  entries.     C.  B. 

O        10.     If  you  have  completed  the  above,  post,  prove  cash,  and  take  daily  statement.  Get  O.K. 

WEDNESDAY'S  BUSINESS 

O  1-     ^(f^ffiV^  your  mail,  freight,  and  express.     Pay  charges.     Answer  2X\.  correspondence, 

receipt  bills,  etc.,  make  remittances  required,  and  enter  same. 
O  2.     a.  Send  $450  by  bank  draft  to  some  student  and  instruct  him  to  invest  the  proceeds 

in  bananas  after  deducting  his  commission. 

b.  Receive  $540  from  some  student  to  invest  in  produce,  after  deducting  $4  wharf- 
age, and  commission  at  5  per  cent.     Buy  goods  and  send  by  early  freight  with  bill  of  costs 
and  shipping  receipt. 
O  3.     Make  three  or  more  shipm-ents,  of  not  less  than  three  items  each,  to  different  students, 

to  be  sold  on  your  account  and  risk.    Ask  an  advance  on  two;  prepay  freight  on  one  of  them. 
O  4.     Solicit  and  receive  three  or  more  consignments  to  be  sold  on  commission.     Advance 

cash  on  two.     Pay  freight  on  all  but  one,  which  should  be  prepaid. 
O  5.     Reyider  an  Account  Sales  of  prunes  "  On  Sale"  sold  and  make  a  remittance  of  cash. 

Also  send  inventory  of  prunes  on  hand.     Receive  ditto. 
O  6.     a.  Sell  all  of  some  consignment  on  account,  5  ds. 

b.  Sell  part  of  two  consignments  and  some  of  your  own  Mdse.  for  cash. 


BUSINESS  PRACTICE  BOOKEEPING  143 

c.  Sell  from  three  consignments  for  cash  and  note  at  6  ds.,  with  interest. 
Note — Render  an  Account  Sales  of  every  consignment  closed  out.     When  a  consignment  sold  on  iime 
is  closed  out,  an  Account  Sales  is  rendered  and  the  proceeds  placed  to  the  credit  of  the  consignor,  in  the 
Journal.     Thus,  Consignment  Dr.  to  Consignor  Cr. 

O  7.  Receive  x^Xmxws  from  shipments  and  make  proper  entries.  Pay  some  student  $400  on 
account,  less  $10  discount.     Collect  ditto. 

O  8.  Clean  out  three  consignments  and  render  Account  Sales  of  the  same.  Enclose  bank 
draft  for  net  proceeds  of  each.     No  checks.     Collect  cash  on  account  and  give  discount. 

O  9.  Sends,  shipment  of  produce  to  some  commission  merchant  and  direct  him  to  sell  the 
same  and  invest  the  proceeds  in  oranges  and  lemons  after  deducting  freight  charges  and  com- 
mission for  both  buying  and  selling.     Ask  for  Account  Sales  and  Account  Purchase. 

O  10-  Receive  a  consignment  of  bananas  from  some  student  to  be  sold  on  commission,  the 
proceeds  to  be  invested  in  butter  after  deducting  charges  and  commission  for  both  selling  and 
buying.     Post,  prove  cash,  and  take  daily  statement. 

THURSDAY'S  BUSINESS 

O  1-     Atte7id\.o  your  mail,  express,  etc.     Buy  stationery,  postage  stamps,  etc. 

O  2.     Re?ider  an  Account  Sales  for  each  invoice  when  entirely  sold  out.     Charge  guaranty 

if  sold  on  account,  or  for  note  guaranteed  by  you. 

O  3.     Make  three  shipments  of  not  less  than  three  items  each.     Ask  an  advance  on  one 

and  prepay  freight  on  one. 
O  4.     Solicit  several  consignments  as  directed  yesterday. 

O  5.     Make  several  sales  for  cash,  and  subject  to  draft,  from  consignments  and  Mdse. 

O  6.     6"^// consignment  in  No.  10  of  yesterday  and  invest  proceeds.      Charge  for  freight, 

dray  age,  insurance,  and  commission.     Make  complete  report  of  Account  Sales  and  send  Account 

Purchase  of  goods  bought. 
O  7.     Pay  on  account  by  check,  note,  and  bank  draft,  less  discount. 

O  8.     Disco2int  at  bank  two  notes.    Leave  a  note  at  bank  for  collection.    Collect  on  account 

by  cash,  note,  and  draft,  and  give  discount. 
O  9.     Draw  on  anyone  owing  you  at  three  days  sight  and  leave  at  bank  for  collection. 

Accept  all  time  drafts  drawn  on  you,  and  pay  all  sight  drafts  in  cash. 
O         10-     Render  Account  Sales  for  Mx,  consignments  closed  out.     If  sold  for   cash,    make 

remittance  to  balance  account.      If  sold  on  account,  state  the  fact  in  your  Account  sales,  and 

place  the  net  proceeds  to  credit  of  shipper.     Post,  prove  cash,  and  take  daily  statement. 

FRIDAY'S   BUSINESS 
Collection  Day 

Attefid  to  your  mail,  express,  etc. 

Exchange  accommodation  notes  with  some  student,  and  borrow  money  at  the  bank. 

a.  Send some:one$600  to  be  invested  in  Mdse.  after  deducting  freight  and  commision, 

b.  Receive  $400  to  be  invested  in  Mdse.  after  deducting  freight  and  commission. 
Telegraph  for  goods  to  be  sent  C.  O.  D.     Ship  a  bill  sold  to  some  student  C.  O.  D. 
Pay  your    traveling   man   $50    for    one   week's   work.     Collect  stall  rent  of   local 

customer,  $20.     Pay  $75  for  repairs  on  warehouse.     (Rent  and  Repair  acct.) 

O  6.     Sell  from  three  consignments  in  one  bill  for  cash;  also  from  two  consignments  on 

account;  also  from  a  consignment  and  from  your  own  Mdse  for  cash. 

O  7.     Close  out  several  consignments  and  render  Account  Sales  of  each. 

O  8.     Collect  on  account,  and  pay  on  account  all  bills  due.      Accounts  are  due  in  six  days. 

O  9.     Z><f/!>fj-zV  cash  in  bank.     Prove  balance  and  rule  cash.      Take  daily  statement.     Post. 

Note — In  posting  from  Cash  Book,  contra.  Discount,  Com.,  Ins.,  etc.,  are  posted  after  being  transferred. 

O  10.  Close  and  rule  all  consignment  accounts  that  balance.  Unclosed  consignment  balances 
are  carried  to  the  "Consignments  Open"  account,  and  unclosed  shipment  accounts  are 
carried  to  the  "Shipments  Open"  account  in  the  General  Ledger.  Close  and  rule  all  shipment 
accounts  that  you  have  returns  in  full.  Their  balances  are  carried  to  "Shipments  Closed" 
account  in  General  Ledger.  Take  a  Trial  Balance  and  make  out  a  Balance  Sheet.  Note  that 
Expense  will  have  a  liability  inventory  of  $100  for  unpaid  rent.  Close  General  Ledger  and 
present  books  for  O.  K. 


o 

1. 

o 

2. 

o 

3. 

o 

4. 

o 

5. 

144  BUSINESS  PRACTICE  BOOKKEEPING 

COMMISSION— Concluded 

Third  Week 
MONDAY'S  BUSINESS 

O  1  •     Make  a  Memorandum  of  all  corrections  suggested  by  your  teacher  and  try  to  improve 

your  work.    Put  your  desk  in  order.    Have  a  place  for  everything  and  everything  in  its  place. 
O  2.     Receive  your  mail,  freight,  and  express.     Pay  charges  on  same.     Order  goods,  and 

prepare  for  the  week's  work, 
O  3.     Pay  rent  due  in  cash.     Pay  for  stationery.     Pay  any  sundries  accounts  due,  in  cash. 

O  4.      Write  a  smart  ad  for  the  paper;  give  order  for  its  publication,  style  of  type,  space, 

and  time  to  run.     Take  it  to  your  teacher  and  get  his  O.  K. 
O  5.     Make  several  shipments;  prepay  freight  on  one  of  them,  and  ask  an  advance  on  one. 

O  6.     Solicit  and  receive  consignments  as  you  can  dispose  of  the  business. 

O  7.     Sell  from  not  less  than  three  consignments  and  from  your  own  Mdse.  in  several  sales. 

O  8.     Send  some  commission  merchant  a  stock  of  Cal.  prunes  "On Sale."     Receive  ditto. 

Note — "  On  Sale"  means  that  the  goods  are  to  be  for  sale  on  commission  at  all  times.     As  the  stock  is 

sold  out  it  is  to  be  replenished  by  additional  shipments. 

O  9.     Do  not  forget    your  insurance,  storage,   and    guaranty  as    directed  in  the  General 

Instructions. 
O         10'     Post^  prove  cash,  and  take  a  daily  statement.     Get  O,  K. 

TUESDAY'S  BUSINESS 
O  1-     i?^^!??^^  your  mail,  freight,  and  express.     Pay  charges. 

O  2.     Answer  all  letters  and  telegrams.     Acknowledge  receipt  of  all  moneys,  and  make 

proper  entry  in  the  Cash  Book. 
O  3.     /^z7/ all  orders  for  Mdse.     Telegraph  to  Commercial  Exchange  for  four  consignments 

of  semi-tropic  fruit — oranges,  lemons,  and  bananas — to  be  sold  on  commission. 
O  4.     Send  three  shipments  of  prunes,  butter,  and   eggs  to  various  parties  to  be  sold  on 

your  account  and  risk.     Prepay  freight  on  one,  and  ask  advance  of  $75  on  another. 
O  5.     Receive  from  Commercial  Exchange,  S.  F.,  by  express,  the  consignments  of  oranges, 

lemons,  etc.,  ordered  by  telegraph.     Pay  freight. 
O  6.     Receive  from  some  wholesaler  a  consignment  of  goods  to  be  sold  on  commission.  The 

freight  charges  should  be  prepaid. 
O  7.     Sell  a.  consignment  for  cash.     Cash  Sales  Book.     Post,  and  render  an  Account  Sales 

of  the  same.     (The  Account  Sales  should  always  be  taken  from  the  ledger  account.) 
O  8.     a.  Sell  part  of  consignment,  and  some  of  your  own  Mdse.  for  cash.     C.  S.  File. 

d.  Sell  from  two  different  consignments  on  account,  5  ds. 

c.  Sell  the  remainder  of  a  consignment  and  Mdse.  for  note  at  3  days,  with  interest. 
O  9.  Receive  an  Account  Sales  of  shipment  sold  for  cash,  and  make  proper  entries.  C.  B. 
O         10-     If  you  have  completed  the  above,  post,  prove  cash,  and  take  daily  statement.  Get  O.K. 

WEDNESDAY'S   BUSINESS 

O  1-     ^^c<??V<?  your  mail,  freight,  and  express.     Pay  charges.     Answer  sXS.  correspondence, 

receipt  bills,  etc.,  make  remittances  required,  and  enter  same. 
O  2.     a.  Send  $540  by  bank  draft  to  some  student  and  instruct  him  to  invest  the  proceeds 

in  bananas  after  deducting  his  commission. 

d.  Receive  $450  from  some  student  to  invest  in  produce,  after  deducting  $4  wharf- 
age, and  commission  at  5  per  cent.  Buy  goods  and  send  by  early  freight  with  bill  of  costs 
and  shipping  receipt. 

O  3.     Make  three  or  more  shipments,  of  not  less  than  three  items  each,  to  different  students, 

to  be  sold  on  your  account  and  risk.    Ask  an  advance  on  two;  prepay  freight  on  one  of  them. 

O  4.     Solicit  and  receive  three  or  more  consignments  to  be  sold  on  commission.     Advance 

cash  on  two.     Pay  freight  on  all  but  one,  which  should  be  prepaid. 

O  5.     Render  an  Account  Sales  of  prunes  "  On  Sale"  sold  and  make  a  remittance  of  cash. 

Also  send  inventory  of  prunes  on  hand.     Receive  ditto. 

O  6.     a.  Sell  zW.  of  some  consignment  on  account,  5  ds. 

b.  Sell  part  of  two  consignments  and  some  of  your  own  Mdse.  for  cash. 


BUSINESS    PRACTICE    BOOKKEEPING  145 

c.  Sell  from  three  consignments  for  cash  and  note  at  6  ds.,  with  interest. 
Note — Render  an  Account  Sales  of  every  consignment  closed  out.     When  a  cotisignment  sold  on  time 
is  closed  out,  an  Account  Sales  is  rendered  and  the  proceeds  placed  to  the  credit  of  the  consignor,  in  the 
Journal.     Thus,  Consignment  Dr.  to  Consignor  Cr. 

O  7-     i?(?(:^/z'^  returns  from  shipments  and  make  proper  entries.     Pay  some  student  $400  on 

account,  less  $10  discount.     Collect  ditto. 

O  8-     Cleaji  out  three  consignments  and  render  Account  Sales  of  the  same.     Enclose  bank 

draft  for  net  proceeds  of  each.     No  checks.     Collect  cash  on  account  and  give  discount. 

Q  9.     Sold  a  shipment  of  produce  to  some  commission  merchant  and  direct  him  to  sell  the 

same  and  invest  the  proceeds  in  oranges  and  lemons  after  deducting  freight  charges  and  com- 
mission for  both  buying  and  selling.     Ask  for  Account  Sales  and  Account  Purchase. 

3  10.  i?£'c<f/z'^  a  consignment  of  bananas  from  some  student  to  be  sold  on  commission,  the 
proceeds  to  be  invested  in  butter  after  deducting  charges  and  commission  for  both  selling  and 
buying.     Post,  prove  cash,  and  take  daily  statement.     Get  O.  K. 

THURSDAY'S  BUSINESS 

O  1-     Attejidio  your  mail,  express,  etc.     Buy  stationery,  postage  stamps,  etc. 

O  2.     Render  an  Account  Sales  for  each  invoice  when  entirely  sold  out.     Charge  guaranty 

if  sold  on  account,  or  for  note  guaranteed  by  you. 

O  3.     Make  three  shipments  of  not  less  than  three  items  each.     Ask  an  advance  on  one 

and  prepay  freight  on  one. 

O  4.     Solicit  several  consignments  as  directed  yesterday. 

O  5.     y^a/^(?  several  sales  for  cash,  and  subject  to  draft,  from  consignments  and  Mdse. 

O  6.     Sell  consignment  in  No.  10  of  yesterday  and  invest  proceeds.     Charge  for  freight, 

drayage,  insurance,  and  commission.  Make  complete  report  of  Account  Sales  and  send  Ac- 
count Purchase  of  goods  bought. 

O  7.     Pay  on  account  by  check,  note,  and  bank  draft  less  discount. 

O  8.     Discount   at   bank  two    notes.     Leave  a  note  at  bank  for  collection.     Collect  on  ac- 

count by  cash,  note,  and  draft,  and  give  discount. 

O  9.     Draw  on  anyone  owing  you  at  three  days  sight   and  leave  at  bank  for   collection. 

Accept  all  time  drafts  drawn  on  you,  and  pay  all  sight  drafts  in  cash. 

O  10.  Render  Account  Sales  for  all,  consignments  closed  out.  If  sold  for  cash,  make  re- 
mittance to  balance  account.  If  sold  on  account,  state  the  fact  in  your  Account  Sales,  and 
place  the  net  proceeds  to  credit  of  shipper.    Post,  prove  cash,  and  take  daily  statement.    Get  O.  K. 

FRIDAY'S  BUSINESS 
Collection  Day 

O         1.     All  shipment  and  consignment  accounts  should  be  closed.     If  it  is  impossible  to  get  or 

make  proper  returns  they  may  be  closed  into  ' '  Shipments  Open  "or  "  Consignments  Open  ' ' 

accounts. 
O         2.     5'(?// <^// J/(a?'^<?.  <?«  ^a«a?  to  Commercial  Exchange  at  10  per  cent,  discount.     Collect  on 

all  notes  and  accounts  receivable,  and  pay  all  outstanding  notes  and  accounts  payable.     Sell 

all  other  property  for  cash.     Also  sell  your  good  will  for  $600. 
O         3.     Deposit  all  your  cash  in  bank.     Post,  prove  cash,  make  out  balance  sheet,  and  close 

your  Ledger. 
O        4.     Render  a  statement  of  your  resources  and  liabilities  to  your  teacher  and  deliver  with  it 

all  assets  called  for,  including  your  certified  check  for  all  cash  in  bank. 
O         5.     Present  books  and  get  your  O.  K. 


146  BUSINESS  PRACTICE  BOOKKEEPING 

Questions  for  Review 

1 .  What  is  a  Commission  Merchant  ? 

2.  Explain  the  difference  between  shipment  and  consignment.     Consignor  and  consignee. 

3.  HQ^no.  freight,  itisurance,  storage,  gtiaranty. 

4.  What  is  a  Shipment  Invoice   and  how  does  it  differ  from  an  Account  Sales? 

5.  What  is  Net  Proceeds;  Entire  Cost? 

6.  Name  the  books  used  in  Commission  Accounting  ? 

7.  Explain  the  use  of  the  Receiving  File  or  Book. 

8.  How  should  the  title  of  a  consignment  be  designated  ? 

9.  Explain  the  method  of  posting  from  the  Consignment  File. 

10.  Describe  the  Commission  Sales  File. 

11.  How  are  postings  made  from  it  ? 

12.  Describe  the  Shipment  File  and  method  of  posting  from  it. 

13.  Describe  the  Commission  Cash   Book. 

14.  What  special  columns  are  introduced  ? 

15.  What  are  the  contra  accounts  and  how  are  they  entered  and  posted  ? 

16.  Discuss  the  Journal  entries  when  rendering  and  receiving  an  Account  Sales  for  goods 
sold  on  account. 

17.  Explain  the  functions  of  the  different  Ledgers  of  Commission. 

18.  What  are  the  general  accounts  of  Commission?     The  special  accounts? 

19.  Describe  the  use  of  Consignments  Open  and  of  Shipmetits  Open  accounts. 

20.  What  Accounts  in  Commission  show  a  lyoss  or  Gain  ? 


^  BANKING  -^ 


Banks  and  Banking 


529.  Banks  are  institutions  organized  for  the  purpose  of  receiving,  paying,  and  investing 
moneys  for  the  accommodation  of  the  public  generally  and  for  the  profit  of  the  bank  in  particular. 

530.  A  State  Bank  is  a  bank  organized  under  the  laws  of  the  state  in  which  it  is  located, 
and  is  subject  to  the  laws  of  that  state. 

531.  A  National  Bank  is  a  bank  organized  under  the  laws  of  the  United  States,  and  is 
conducted  in  conformity  with  laws  established  by  Congress. 

532.  Private  Banks  are  conducted  as  private  enterprizes  and  therefore  are  not  subject 
to  the  regulations  required  of  National  or  State  banks. 

533.  Most  Banks  therefore  are  corporations  and  are  subject  to  the  laws,  either  state  or 
national,  governing  such  institutions. 

534.  A  National  Bank  may  be  formed  by  five  or  more  persons  uniting  for  that  purpose. 
They  must  specify  in  their  "  Organization  Certificate"  as  follows: 

1.  The  nanie  of  the  bank  or  association. 

2.  The  place  of  business,  city,  county,  and  state. 

3.  The  amount  of  the  capital  stock  and  the  number  of  shares  into  which  it  is 
divided. 

4.  The  names  and  residences  of  the  shareholders. 

5.  The  number  of  shares  held  by  each. 

6.  A  declaration  that  the  certificate  is  made  for  the  purpose  of  availing  themselves 
of  the  advantages  of  the  Act  of  Congress. 

535.  A  Board  of  Directors  of  at  least  five  in  number  is  elected  who,  in  turn,  elect  the 
regular  bank  officers. 

536.  Xo  he  eligible  as  a  director  one  must  own  at  least  ten  shares  of  the  bank  stock 
having  a  par  value  of  $100  per  share. 

537.  In  Order  to  begin  business,  fifty  per  cent,  of  the  capital  stock  must  be  paid  in,  and 
ten  per  cent,  monthly  thereafter  until  all  has  been  paid. 

538.  After  all  the  requirements  have  been  complied  with,  the  Comptroller  of  Currency 
issues  to  the  association  a  "  certificate"  which  authorizes  it  to  begin  business.  It  then  becomes 
a  corporate  body;  it  may  sue  and  be  sued,  and  must  make  not  less  than  five  reports  per  year  to 
the  Comptroller  of  Currency. 

539.  National  Bank  Notes  or  currency  may  be  issued  by  any  national  bank  upon  de- 
positing with  the  Treasurer  of  the  United  States,  as  security.  United  States  bonds,  interest  bear- 
ing state,  city,  town,  county,  or  other  legally  constituted  municipal  bonds,  approved  by  the 
Secretary  of  the  Treasury,  in  an  amount  not  to  exceed  the  par  value  of  such  bonds  and  not  to 
exceed  the  unimpaired  capital  and  surplus  of  the  association. 

540.  Dividends  are  declared  semi-annually,  but  before  each  dividend  is  declared,  the 
bank  must  carry  one-tenth  of  its  profits  to  the  surplus  fund,  until  it  shall  equal  twenty  per  cent, 
of  its  capital  stock. 


BUSINESS    PRACTICE    BOOKKEEPING 


149 


OFFICERS  AND  ACCOUNTANTS 

541.  The  Principal  Officers  of  a  bank  are:  President,  Vice  President,  Cashier,  Secre- 
tary, Assistant  Cashier,  Receiving  Teller,  Paying  Teller,  and  Accountants. 

542.  The  President  is  the  highest  executive  officer  of  the  bank.  His  principal  duties 
are  to  preside  over  the  directors'  meetings,  to  see  that  their  orders  are  executed,  to  act  as  general 
advisor  of  the  board  and  of  the  employees,  and  to  exercise  the  authority  of  the  board  during  its 
recess. 

543.  The  Vice  President  performs  the  duties  of  the  President  in  the  absence  of  that 
executive. 

544.  The  Cashier  in  many  banks  has  nearly  as  important  duties  to  perform  as  has  the 
President.  He  is  usually  the  Secretary  of  the  Board  of  Directors,  and  has  charge  of  the  stock 
books.  His  signature  with  that  of  the  President  is  required  on  all  certificates  of  stock,  also  on 
all  bank  notes  circulated  by  the  bank,  and  on  all  bank  paper  of  issue.  He  or  the  Assistant 
Cashier  usually  signs  all  drafts  on  other  banks,  and  endorses  all  drafts  and  notes  sent  away  for 
collection.  He  is  also  general  manager  of  the  clerical  department  of  the  bank,  and  questions  of 
accounting  are  decided  by  him. 

545.  The  tellers  receive  and  pay  out  the  money  of  the  bank.  They  must  be  rapid  and 
accurate,  and  must  be  thoroughly  acquainted  with  the  signatures  of  depositors  and  of  corre- 
spondents. 

546.  The  Accountants'  duties  are  wholly  clerical.  They  have  charge  of  the  detail  work 
of  keeping  the  individual,  general,  and  special  accounts  of  the  bank. 

Bank    Paper 

547.  Bank  Paper  embraces  all  cash  items  issued  or  received  by  the  bank  as  cash,  and  con- 
sists of  the  following:  Natio7ial  Bank  Notes,  Cashier' s  Checks,  Certificates  of  Deposit,  Certified 
Checks,  Depositors^  Checks,  Bank  Drafts,  Bills  of  Exchange,  Letters  of  Credit,  etc. 

548.  National  Bank  Notes  can  be  issued  by  national  banks  only,  and  are  legal  cur- 
rency, although  not  a  legal  tender.     See  Art.  589. 

549.  Cashier's  Checks  are  issued  by  some  banks  in  lieu  of  cash  and  are  redeemable  in 
cash  on  demand. 

Form  of  Cashier's  Check 


•^ay y^ 


)::^//i^i-y^^a^^a^_ 


.•^  /^/3.. 


cypfc^. 


iPf./f^ 


«iiffifflsiK^ii 


y/?'y?^/://?/^^^JZ  S'/O^ 


^^/-ifiL-^-f^TXi^.'t^^'eii^^.-f!^  .-^^i<^^^^y  yr 


CASHim. 


Note — Some  large  banks  pay  for  discounts,  loans,  expenses,  etc.,  in  Cashier's  Checks,  which  may  be 
cashed  at  any  time  upon  presenting  the  same  to  the  Paying  Teller. 


150 


BUSINESS    PRACTICE    BOOKKEEPING 


550.  Certi£cates  of  Deposit  are  of  two  kinds,  demand  and  time.  Demand  Certificates 
are  issued  to  depositors  who  may  have  them  cashed  on  demand.  Time  Certificates  are  payable  at 
the  end  of  a  certain  periods  of  time  and  usually  draw  interest. 

Form  of  Certificate  of  Deposit 


80-1088 


?fe.  ^591 


^y^ 


N0TSUBUEGT  TOGHEGK. 


L 


n 


551.     Depositors'  Checks  are  the  checks  of  depositors  and  are  received  as  deposits,  or 
are  cashed  by  the  bank  upon  presentation. 

Form  of  Depositor's    Check 


M. 


7b- 


For. 


Bal  bmulhrfbrw'd 
Amount  deposited 

Total 
Am ounF  this  check 
Bal.  carried  fbrwd 


g^AzC 


JiS" 


v/a/^n 


552.     Certified  Checks  are  depositors'  checks  which  have  been  presented  for  certification 
and  have  received  the  indorsement  of  the  bank  on  the  face  of  the  same.     See  illustration. 

Form  of  Certified   Check 


BUSINESS    PRACTICE    BOOKKEEPING 


151 


553.     Bank:  Drafts  are  the  checks  of  one  bank  upon  another  bank  and  are  received  as  de- 
posits or  are  cashed  the  same  as  depositors'  checks. 

Form  of  Bank  Draft 


•fc)  JNational  f  )ank  of  Com  in  (^  re/;, 

6l.Louis.A\o. 


CASH  I  Eft. 


1 

554.  Hills  of  Exchange  are  bank  drafts  drawn  by  a  bank  in  one  country  upon  a  bank 
in  another  country.  Bil/s  of  Exchange  may  be  either  demand  or  time  and  are  subject  to  the 
fluctuations  of  the  money  market. 

555.  J^etters  of  Credit  are  a  kind  of  bill  of  exchange  which  may  be  made  payable  at 
different  times  and  places,  and  are  very  convenient  to  travelers.     See  discussion,  pp.  53,  54. 

Bank  Accounting 

556.  Bank  Accounting  may  be  divided  into  the  following  departments: 

1.  The  Accounts  with  the  stockholders,  the  number  of  shares  owned  by  each  and 
transfers  of  the  same,  and  the  dividends  declared  or  the  assessments  levied. 

2.  The  Accounts  with  the  depositors,  their  deposits  and  checks,  and  their  daily 
balances. 

3.  The  Accounts  with  correspondent  banks,  including  all  of  their  drafts  cashed  by 
the  bank,  and  all  sundries  remittances  sent  to  them  and  charged  to  their  accounts;  also  all 
remittances  received  from  them  and  all  drafts  drawn  on  them  and  credited  to  their  accounts. 

4.  The  Accounts  with  Sundries  Banks,  including  notes,  drafts,  and  all  commercial 
paper  received  or  sent  direct  for  collection. 

5.  The  Accounts  with  Loans  and  Discoutits ,  including  notes,  drafts,  bonds,  stocks, 
etc.,  bought  or  collected  by  the  bank. 

6.  'V'h&  Accounts  yv'iih.  Conmiercial  Paper  \ssvl&6l  by  the  bank;  such  as,  bank  notes 
for  Circulation,  Certificates  of  Deposit,  Cashier's  Checks,  Certified  Checks,  etc, 

7.  The  Accounts  relating  to  the  properties  of  the  bank;  such  as.  Real  Estate,  Chat- 
tels, Furniture  and  Fixtures,  Stationery,  etc. 

8.  The  Accounts  showing  the  principal  losses  or  gains  of  the  business;  such  as, 
Expense,  Interest  and  Discount,  Collection  and  Exchange,  Premium  and  Discount,  Sala- 
ries, Loss  and  Gain,  etc. 

9.  The  Accounts  into  which  are  closed  the  net  profits  of  the  business;  such  as, 
Dividend  Acct.,  Surplus  Fund,  Reserve  Fund,  and  Undivided  Profits  Acct. 

10.     The  Cash  Account,  which  always  shows  the  amount  of  cash  on  hand. 

557.  There  are  two  principal  systems  or  methods  of  keeping  the  accounts  of  a  bank. 
For  convenience,  we  will  call  them  the  New  York  System  and  the  National  System. 


152  BUSINESS    PRACTICE    BOOKKEEPING 


The  New  York  System 


558.  The  New  York  System  is  the  oldest.  It  has  been  popular  for  many  years  and  is 
now  the  system,  in  modified  forms,  used  by  many  of  the  banks  of  the  country, 

559.  The  Books  Used  in  the  New  York  System  of  bookkeeping  are  the  General  Cash 
Book,  the  Individual  or  Depositor' s  Ledger,  Draft  Registers,  Reynittance  Register,  Loan  and  Dis- 
count Register,  Collection  Register,  and  General  Ledger. 

560.  The  Blank  F'orms  and  memoranda  necessary  depend  upon  the  amount  of  business 
handled  by  the  bank.  The  following  are  some  of  the  most  important:  Discount  and  Collectio?i 
Maturity  Meynorandums ,  Receiving  and  Paying  Tellers'  Proofs,  Statements  of  Account,  Clearhig 
House  Proofs,  Deposit  Slips,  Pass  Books,  Abstracts  of  Clearings,  etc. 

561.  Piling  Devices  of  various  kinds  and  for  various  uses  are  necessary  for  the  safe 
keeping  of  bank  papers  and  records.  Among  them  are  the  following:  Files  for  classifying  in- 
coming papers  and  currency,  index  files,  letter  files,  check,  draft,  and  commercial  paper  files  of 
all  kinds,  wallets,  ticklers,  etc. 

The  Individual  or  Depositors'  I^edger 

562.  In  the  Individual  or  Depositors'  I/edger  are  kept  the  accounts  with  depositors 
who  are  credited  with  all  moneys  and  cash  paper  deposited,  and  debited  with  all  checks  drawn  by 
them  upon  the  bank. 

563.  The  hidividual  Ledger  contains  money  columns  for  Deposits,  for  Checks  in  Detail^ 
for  Total  Checks,  and  for  Daily  Balayices.  Its  purpose  is  to  show  at  a  glance  the  balance  of  any 
depositor's  account.     It  also  shows  the  total  deposits  and  the  total  checks  for  the  day. 

564.  Credit  Balances  are  always  written  in  black,  and  Overdrafts  in  red  ink. 

565.  In  listing  checks  in  the  Individual  Ledger,  the  first  check  listed  should  be  written  on 
the  base  line  and  the  others  above  as  noted  in  the  model.  By  alternating  columns  with  a  little 
care,  no  trouble  will  be  found  in  listing  all  the  checks  deposited  or  cashed. 

566.  The  Deposits  are  taken  from  the  Deposit  Slips  and  entered  in  the  Deposits  column. 
Should  more  than  one  deposit  from  the  same  person  be  received  in  one  day  they  may  be  added 
together  and  entered  as  one  deposit,  or  one  may  be  written  above  the  other. 

567.  To  find  the  balance  for  the  day  of  any  personal  account,  subtract  the  total  checks 
from  the  sum  of  the  day's  deposit  and  previous  day's  balance. 

568.  To  Prove  the  accuracy  of  the  Individual  Ledger,  subtract  the  Total  Checks  from  the 
sum  of  the  previous  day's  Balarice  and  the  Deposits  for  the  day,  the  result  should  equal  the  total 
Balance. 

Note — In  finding  the  total  Deposits  in  the  Balance  Column,  take  the  difference  of  the  black  and  red 
ink  entries. 

569.  The  Skeleton  I^edger  Proof  Sheet  used  in  wholesale  accounting  and  described 
on  pages  116-117  is  used  by  all  up-to-date  banks  in  proving  the  accuracy  of  the  Individual  Ledger. 
It  is  a  great  labor  saver  as  it  necessitates  the  handling  only  of  the  personal  accounts  affected 
each  day. 

570.  The  Xotal  Deposits  for  the  day  are  carried  to  the  debit  of  Cash  in  the  General  Cask 

Book  and  the  total  checks  for  the  day  to  the  credit  of  the  same. 

f 

571.  Depositor's  Pass  Books  should  be  written  up  at  least  once  per  month  and  recon- 
ciled with  the  accounts  in  the  Individual  Ledger. 


BUSINESS    PRACTICE    BOOKKEEPING 


153 


FORM    OF    INDIVIDUAI,    I^FDGFR 

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Explanation — In  the  above  is  illustrated  a  day's  entries  in  the  Individual  Ledger.  It  will  be  noted 
that  each  depositor  is  credited  with  his  deposits  and  debited  with  his  checks.  The  balances  are  extended  to 
the  Balance  column. 

Proof — The  total  Deposits  of  the  previous  day,  plus  the  sum  of  the  days  deposits,  less  the  sum  of  the 
checks  equals  the  total  Deposits  for  the  day.     Thus,  $49735.10  plus  $5666.25  minus  $4700.70  equals  |50700.65. 

Note — The  Skeleton  Ledger  Proof  Sheet  illustrates  how  the  work  of  proving  the  Individual  Ledger 
may  be  abbreviated.  The  accounts  subject  to  a  change  are  the  only  ones  brought  forward.  The  difference 
between  the  first  and  second  days  balances  either  added  to  or  subtracted  from  the  deposits  of  the  previous 
day  will  give  the  new  total  Deposits.  Thus,  $24069.55  minus  $23104.00  equals  $965.55;  and  $49735.10 plus 
$965 .  55  equals  $50700 .  65 . 

Note — It  will  be  noted  that  A.  R.  Waters'  account  has  changed  to  a  $75  overdraft.  This  should  be 
written  in  red  ink. 

572.  The  student  will  rule  his  own  paper  and  work  out  the  following  day's  business  similar 
to  the  above,  proving  the  same  by  full  extensions  and  also  by  the  Skeleton  Ledger  Proof  Sheet 
system: 

Individual  I^edger  Practice 

O         1-     Rule  paper  for  a  day's  work  and  receive  the  following  deposits:   Chas.  Austin,  $1000; 

M.  E.  Cook,  $500;  B.  F.  Hall,  $1200;  A.  H,  Ore.  $750;  W.  C.  Roberts,  $2000;  I..  A.  Sweet, 

$800;  J.  R.  Thomas,  $100;  A.  R.  Waters,  $500. 
O         2.     The  following  checks  were  received:     Burgess  Bros.,  $100;  $80;  $210.     M.E.Cook, 

$245;  $300.     B.  F.  Hall,  $335.50;  $225.40.     L.  A.  Sweet,  $140;  $375;  $135.25;  $27.50.   J.  R. 

Thomas,  $195.40.     Eli  Young,  $44.20;  $200. 
O         3.     Present  your  work  to  teacher  for  approval.  ^ 


154 


BUSINESS    PRACTICE    BOOKKEEPING 


I/oan  and  Discount  Register 

574.  In  the  Ivoan  and   Discount  Register  is  entered  all  commercial  paper  bought  by  the 
bank,  including  the  notes  and  personal  drafts  cashed  for  the  accommodation  of  customers. 

575.  I/Oans  are  the  promissory  notes  received  by  the  bank  from  parties  to  whom  money 
is  loaned  at  a  specified  rate  of  interest  on  the  face  value. 

576.  Discounts  consist  of  all  commercial  paper  bought  by  the  bank  at  a  discount  from 
their  face  value  or  from  their  value  at  maturity. 

577.  Collection  is  usually  charged  on  discounts  that  must  be  sent  to  other  banks  for  col- 
lection, and  also  on  paper  that  requires  more  or  less  time  and  attention  to  collect. 

578.  Charges  are  also  made  for  notary's  protest  fees,  exchange,  recording  of  mortgages, 
■deeds  of  trust,  etc.,  when  necessary, 

FORM    OP    DISCOUNT    RBGISTBR 

(Left  hand  page) 
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NoTB— Study  the  above  forms  until  you  thoroughly  understand  them,  and  can  prove  the  day's  work. 
597.     ^ive  Money  Columns  will  be  noted  in  the  above  form,  as  follows: 

1.  The  Pace  of  the  note  or  draft  discounted. 

2.  The  Interest  due  at  maturity. 

3.  The  Discozint  charged  on  the  gross  amount  due  at  maturity. 

4.  The  Charges  for  collection,  exchange,  protest,  etc. 

5.  The  Net  Proceeds,  or  the  cash  value  paid  for  the  discounted  paper. 

580.     The  Amount  of  a  note  at  matiirity  is  what  is  really  bought  by  the  bank,  and  this 
amount  less  the  discount  and  other  charges  should  be  the  net  proceeds  of  the  note. 


BUSINESS  PRACTICE  BOOKKEEPING 


155 


581.  To  Prove  the  day's  work  in  the  Discotait  Register,  the  sum  of  tl  face  of  paper  and 
inierest  should  equal  the  sum  of  the  discount,  collection  charges,  and  net  proceeds. 

582.  StLmmarize  in  the  General  Lash  Book  by  crediting  Cash  and  debiting  Loans  and  Dis- 
counts for  the  footing  of  ''Face  o^  Paper '^  column  and  Interest  for  the  footing  of  " hiterest'* 
column,  also  by  debiting  Cash  and  creditiiig  Discount  and  Collection  Charges  for  the  footings  of 
those  columns. 

583.  When  I^oans  and  Discounts  are  paid  at  maturity,  or  when  partial  payments  are 
made  on  them,  Cash  is  debited  \w  the  General  Cash  Book  for  the  face  and  Loa?is  a7id  Discounts 
are  credited.     Interest  collected  is  credited  to  the  Interest  and  Discount  A.(  ^ount. 

Draft  and  Remittance  Registers 

584.  In  the  Draft  and  Remittance  Registers  are  kept  the  accounts  with  correspond- 
ent banks. 

585.  Correspondent  Banks  are  those  banks  with  whom  the  local  bank  has  a  standing 
credit  and  a  current  account.  They  are  usually  located  in  some  metropolitan  city;  as,  New 
York,  Boston,  Philadelphia,  Chicago,  St.  L^ouis,  New  Orleans,  and  San  Francisco. 

586.  In  the  Draft  Registers  are  entered  drafts  drawn  on  correspondent  banks,  and  all 
drafts  drawn  on  the  local  bank  by  its  correspondents.  Special  columns  for  dates,  numbers,  pur- 
chasers, payees,  drawers  of  drafts,  amounts,  exchange,  etc.,  are  given  to  make  the  records  com- 
plete. 

587.  Correspondent  Banks  are  credited  with  the  drafts  drawn  on  them  by  the  local  bank, 
and  debited  with  the  drafts  drawn  on  and  received  by  the  local  bank.  Returned  drafts  are  also 
charged  to  the  bank  upon  which  they  are  drawn. 

FORM    OF    DRAFT    RBGISTil^R 

(Right  hand  page) 


IN   WHOSE    FAVOR   DRAWN 


TOTAL  i/      EXCHANGE 


PURCHASER 


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588.  Draft  Registers  should  be  reconciled  with  the  correspondent's  records  at  least 
once  per  month.  This  is  done  by  taking  into  consideration  the  drafts  "  en  route"  together  with 
those  already  received. 

589.  To  Summarize  from  the  Draft  Registers,  transfer  the  total  debits  for  the  day  of  each 
Register  to  the  credit,  and  the  total  credits  for  the  day  to  the  debit  of  the  General  Cash  Book,  each 
one  with  its  proper  title,  the  name  of  its  bank. 

590.  Collection  and  \Exchange  is  entered  in  the  debit  of  the  General  Cash  Book  in  its 
proper  column  and  under  its  proper  title  as  it  represents  cash  received  by  the  bank. 

591.  The  Remittance  Register  or  Remittance  Sheet  is  used  to  record  all  commercial 
paper  sent  to  a  correspondent  bank  for  credit.  The  form  combines  original  and  duplicate  sheets, 
the  original  being  sent  with  the  remittances  by  mail,  and  the  duplicate  retained  for  record. 


156 


BUSINESS  PRACTICE   BOOKKEEPING 


592.     Remittances  are  received  from  correspondent  banks  for  credit  and  collection,  and 
records  of  the  same  are  filed  for  future  reference. 

FORM    OP    RPMITTANC^    SHPPT 


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593.  Correspondent  Banks  are  f^ar^^^  with  all  remittances  sent  them  and  credited  with  all 
commercial  paper  received  from  them;  therefore  summarize  in  the  General  Cash  Book  hy  crediting 
Cash  for  the  remittances  sent,  and  by  debiting  Cash  with  those  received. 

594.  Some  Banks  combine  the  Draft  Registers  and  the  Remittance  Registers  in  one  book, 
but  it  is  preferable  to  keep  the  draft  account  separate  from  the  remittances,  since  the  drafts  re- 
ceived are  all  cancelled  and  kept  as  vouchers. 

595.  Proper  Indorsement  of  all  commercial  paper  sent  either  for  credit  or  collection  is 
strictly  necessary.  Paper  not  properly  indorsed  should  be  returned  and  charged  back  to  the 
sender. 

The  Collection  Register 

596.  In  the  Collection  Register  is  entered  a  record  of  all  commercial  paper  received 
by  the  bank  for  collection.  This  book  is  for  memoranda  only  and  no  entry  is  made  in  the  Gen- 
eral Cask  Book  until  collections  are  made  and  cash  received. 

FORM    OF    COI,I,FCTION    RFGISTFR 

(Left  hand  page) 

/  ^  /  —  ' 


DATE 


ENDORSER 


WHERE   PAYABLE 


TO  WHOM   SENT 


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597.  When  cash  is  received  for  collections  the  proper  credit  must  be  made  in  the  Individual 
Ledger  or  General  Cash  Book  and  the  same  so  noted  in  the  Collection  Register. 

598.  Out  of  ^own  ' '  collections' '  are  sent  to  other  banks  for  collection  and  when  returns 
are  received  the  proper  credits  and  entries  are  made  the  same  as  in  local  collections. 


BCrS/NESS    RRACTICE    BOOKKEEPING 


157 


599.  Commercial  Paper  received  from  other  banks  for  collection  is  also  recorded  in  the 
Collection  Register.  When  cash  is  received  for  these  ' '  collections  ' '  the  net  proceeds  is  remitted 
to  the  sender  by  metropolitan  bank  draft,   the  charge  for  collecting  only  being  entered  in  the 

Cash  Book.  ^^^ 

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Bank  Paper  Accounts 

600.  'Bank:  Paper  consists  of  the  bank  circulation,  notes  payable,  certificates  of  deposit, 
cashier's  checks,  certified  checks,  etc.,  issued  by  and  payable  by  the  bank. 

601.  Circulation  is  the  name  and  title  given  to  the  National  Bank  Notes  or  currency 
issued  by  the  bank,  and  are  the  bank's  promises  to  pay  in  the  legal  currency  of  the  United  States 
on  demand. 

602.  When  National  Bank  Notes  are  received  for  circulation,  Cas/i  is  debited  and  Cir- 
culation credited  in  the  General  Cash  Book  for  the  total  amount  issued. 

603.  Notes  Payable  are  sometimes  issued  by  banks  when  they  find  it  necessary  to  in- 
crease the  cash  on  hand  and  when  it  is  impossible  to  collect  on  commercial  paper  held  by  the 
bank.     When  such  notes  are  issued  CasA  is  debited  for  the  face  value  of  the  same. 

604.  Certificates  of  Deposit  are  given  to  customers  who  do  not  wish  to  draw  checks 
against  their  accounts.     Banks  usually  allow  interest  on  such  deposits. 

605.  The  Certi&cate  of  Deposit  Register  is  similar  to  the  Draft  Register.  In  this 
book  a  complete  record  of  all  certificates  issued,  including  date,  number,  to  whom  issued,  to 
whom  payable,  the  amount,  and  when  paid  is  kept.  Certificates  of  Deposit  are  credited  when 
given  and  debited  in  the  Geyieral  Cash  Book  when  paid. 

606.  Cashier's  Checks  are  issued  by  the  Cashier  or  Assistant  for  various  purposes. 
These  checks  are  cashed  by  the  Paying  Teller  upon  presentation.  When  issued  they  are  credited 
to  the  Cashier' s  Account^  and  when  paid  debited  to  the  same. 

607.  Certified  Checks  are  those  checks  of  depositors  which  have  been  ^'certified''  by 
the  Cashier  or  Teller.  To  ''certify'''  a  check  is  to  write  the  word  ''Certified'"  across  the  face 
with  the  date  and  name  of  the  bank  and  the  name  of  the  one  so  certifying.  Such  checks  are 
charged  at  once  to  the  depositor's  account  and  credited  to  Certified  Checks  account.  Upon  the 
return  of  the  check,  it  is  charged  to  Certified  Checks  account. 

608.  The  Accounts  relating  to  the  tangible  properties  of  the  bank,  such  as:  Real  Estate, 
Chattels,  Furniture  and  Fixtures,  Stationery,  etc.,  are  treated  the  same  as  in  commercial  book- 
keeping, and  their  titles  belong  to  the  General  Ledger. 

609.  The  Accounts  showing  the  principal  losses  or  gains  of  a  bank  are:  Expense,  Inter- 
est and  Discount,  Collectio?i  and  Exchange,  Premizwt  and  Discou7it,  Commission,  Brokerage,  Sal- 
aries, Rent,  Losses  and  Gains,  etc.,  are  titles  belonging  to  the  General  Ledger,  and  are  treated 
similar  to  such  accounts  in  commercial  accounting. 

610.  The  Accounts  into  which  the  net  loss  or  net  gain  is  closed  are  the  Surplus  Fund, 
Reserve  Fund,  Dividend  Account,  and  Undivided  Profits  Account. 


18 


BUSINESS  PRACTK  E  in)OKKEEPING 


THB     GBNBRAlv     CASH    BOOK 

612.  The  General  Cash  Book  is  a  principal  book  of  Banking,  and  into  it  are  for- 
warded summaries  from  all  the  books  and  files  of  original  entry.  It  is  very  similar  in  both  form 
and  use  to  the  ordinary  Cash  Books  already  described. 

613.  On  the  left  or  debit  side  are  entered  all  items  of  cash  received,  either  as  original  entries 
or  as  summaries  from  some  other  record.  On  the  right  or  credit  side  are  entered  all  cash  pay- 
ments made  by  the  bank  either  as  original  entries  or  as  summaries  from  other  records. 

General   Cash  Book  Debits 


DATS 

s       TITLES  CR. 

EXPLANATION 

/ 

OLL.    &   BS 

TOTALS 

July 

I 

Loans  and  Discounts 

collected 

2IOO   1 

Interest 

collected 

i2'/8  1  40 

Discount 

per  Discount  Register 

6 

lo 

12 

10 

N.  K  National  Bank 

Drafts  sold 

2 

15 

861 

55 

Chicago  Nat'f  Bank 

Drafts  sold 

5 

2000 

Sundries  Banks 

collections 

200 

Stocks  and  Bonds 

due  and  collected 

lOOOO 

Certified  Checks 

certified  today 

582 

50 

Certificates  of  Deposit 

issued 

124.0 

Deposits 

per  Individual  Ledger 

5666 

25 

Collection  and  Exchange 

total 

13 

25 

13 

25 

28954 

■  05 

^ 

^ 

^^ 

^^ 

1    93neA 

n 

614.     The  following  are  the  accounts  usually  found  on  the  debit  side  of  the  General  Cash 
Book. 

1.  Deposits,  forwarded  from  the  footing  of  the  deposits  column  in  the  hidividual 
Ledger. 

2.  Correspondent  Banks,  forwarded  from  the  drafts  sold  as  recorded  in   the  Draft 
Registers  and  Remittances  received, 

3.  Sundries  BanTcs,  credited  with  cash  items  received  for  collection  and  credit. 

4.  Loayis  and  Discounts,  including  all  collections  on  this  account  during  the  day. 

5.  hiterest  and  Discount,  the  total  of  all  interest  and  discount  received. 

6.  Collection  and  Exchange,  charges  on  drafts  sold  and  for  making  collections. 

7.  Certificates  of  Deposit,  both  time  and  demand  given  for  cash  received. 

8.  Certified  Checks,  which  have  been  certified  during  the  day  and  charged  to 
depositors'  accounts. 

9.  Cashier'' s  Checks,  given  out  instead  of  cash  in  payment  of  sundries  accounts. 
10.     General  Ledger  Sundries  Accounts  for  which  cash  is  received;  such  as,  Real 

Estate,  Chattels,  Furniture  and  Fixtures,  Stocks  and  Bonds,  Premiiun,  Profit  and  Loss,  etc. 


BUSINESS    PRACTICE  BOOKKEEPING 


159 


615.  The  General  Cash  BooTc  is  sometimes  divided  into  two  books  or  sheets  called  the 
Debit  Journal  and  Credit  Journal,  and  some  banks  do  not  use  a  Cash  Book  at  all,  but  forward  all 
items  from  original  vouchers  directly  to  the  Individual  and  General  lycdgers. 

Note — We  prefer,  for  school  use,  to  use  the  General  Cash  Book.     A  student  who  understands  this, 
book  can  easily  adapt  himself  to  any  other  method. 

616.  'Bonr  Money  Columns,  two  on  the  debit,  and  two  on  the  credit  side  of  the  Gen- 
era/ Cash  Book  are  illustrated.  Sundries  Collection  and  Exchange  on  the  debit,  and  Expense  on 
the  credit  are  special  columns  very  convenient  for  such  entries. 


General  Cash  Book  Credits 

DATE 

TITLE  DR. 

EXPLANATION                                 v'           EXPENSE              TOTALS 

July      I 

!      Loans  and  Discounts 

per  Dis.  Register 

2440 

Interest 

on  above  Dr. 

21 

N.  V.  National  Bank 

Remittance  and  drafts 

2260 

75 

Chicago  National  Bank 

Remittance  and  drafts 

500 

S.  F.  National  Bank 

Remittance  and  drafts 

4500 

Expense 

salaries  paid 

750 

Taxes 

paid  2d  installment 

1000 

Furniture  and  Fixtures 

boH  adding  machine 

575 

Dividends 

paid  in  cash 

400 

Certified  Checks 

returned 

4S5 

50 

Certificates  of  Deposit 

redeemed 

842 

25 

Cashier^  s  Checks 

cashed 

708 

25 

Individual  Checks 

per  Individual  Ledger 

4700 

70 

Expense 

total 

750 

750 

ni'uincc 

cash  increase  for  the  day 

mf^ 

bh 

23954 

Of 

617.     The  following  are  the  accounts  usually  found  on  the  credit  side  of  the  General  Cash 


Book: 


1.  Checks,    forwarded  from  the    footings  of  the  checks  column  in  the  Individual 
Ledger. 

2.  Correspondent  Banks,  forwarded  from   the    drafts  cashed  as  recorded  in   the 
Draft  Registers  and  Remittance  Sheets  mailed. 

3.  Sundries  Banks,  debited  with  cash  items  sent  for  collection. 

4.  Loans  and  Discounts,  the  total  "  face  of  paper"  of  all  loans  ox  discounts  bought 
during  the  day. 

5.  Interest  and  Discount,  paid  on  deposits,  on  notes  payable,  or  charged   from 
Discount  Register. 

6.  Collection  and  Exchange,  paid  to  other  banks  for  making  collections. 

7 .  Certificates  of  Deposit,  both  time  and  demand  cashed  by  the  bank  or  received 
for  credit. 

8.  Certified  Checks,  cashed  by  the  paying  teller  or  received  for  credit. 

9.  Cashier' s  Checks,  either  cashed  or  received  for  credit. 

10.  General  Ledger  Sioidries  Accounts,  for  which  cash  is  paid;  such  as,  Real  Es- 
tate, Chattels,  Furniture  and  Fixtures,  Stocks  and  Botids,  Premium,  Stationery,  Expense, 
Taxes,  Profit  and  Loss,  etc. 


160  BUSINESS    PRACTICE    BOOKKEEPING 

616.  The  Daily  Salance  of  the  General  Cash  Book  shows  the  increase  or  decrease  of  the 
cash  hi  bank  for  the  day.     This  Balance  is  carried  to  the  Cash  Account  in  the  General  Ledger. 

617.  Cashiers  sometimes  carry  the  total  cash  balance  forward  daily  in  the  Gejieral  Cash 
Boole.     This  is  easily  done  as  in  any  ordinary  Cash  Book. 

618.  While  the  Daily  Balance  shows  the  actual  increase  or  decrease  of  the  cash  in  bank, 
the  Total  Cash  Balance  shows  the  total  cash  in  bank. 

General  Cash  Book  Practice 

Note — The  following  represents  one  day's  business  of  a  bank.     The  student  should  study  each  entry 
carefully  in  connection  with  the  memoranda  and  previous  discussions,  and  explain  the  same  to  the  teacher. 

Cash  Received: 

1.  Collected  on  lyoans  and  Discounts,  cash,  $2100. 

2.  Collected  Interest  on  Bonds;  $1000;  on  Loans,  $278.40. 

3.  Discount  on  lyOans  and  Discounts  bo't,  $12.10;     Collection,  $6.10. 

4.  Sold  drafts  on  N.  Y.,  $861.55;  Collection  on  same,  $2.15. 

5.  Sold  drafts  on  Chicago,  $2000;  Collection  on  same,  $5. 

6.  Rec'd  returns  for  draft  sent  to  Petaluma,  $200. 

7.  Rec'd  cash  for  Bonds  paid  today,  $10,000. 

8.  Certified  checks  for  M.  E.  Cook,  $172.60;  for  Chas.  Austin,  $200;  for  P.  Tom- 
linson,  $210. 

9.  Issued  Certificates  of  Deposit  for  cash  rec'd,  $1240. 
10.  Deposits  for  the  day  per  Ind.  Ledger,  $5666.25. 

Cash  Paid: 

1.  For  lyOans  and  Discounts,  per  Dis.  Reg.,  $2440. 

2.  Interest  on  same,  $21, 

3.  N.  Y.  Drafts  and  Remittances,  per  Dft.  Reg.,  $2260.75. 

4.  Chicago  Drafts  cashed  and  deposited,  per  Dft.  Reg.,  $500. 

5.  San  Francisco  Drafts  and  Remittances,  $4500. 

6.  Paid  Salaries,  $750. 

7.  Paid  second  installment  of  taxes,  $1000. 

8.  Bo't  a  Burroughs  Adding  Machine,  $575. 

9.  Paid  Dividends,  $400. 

10.  Certified  Checks  cashed  and  deposited,  $485.50. 

11.  Certificates  of  Deposit  redeemed,  $842.25. 
'12.  Cashier's  checks  cashed,  $708.25. 

13.  Individual  checks  received,  $4700.70. 

Individual  Deposits 

629.  A  Deposit  consists  of  the  items  of  currency,  checks,  drafts,  etc.,  deposited  by  a 
customer  in  a  bank  for  credit. 

630.  A  Deposit  Slip  should  contain  an  itemized  list  of  the  Gold,  Silver,  Currency, 
Checks,  Drafts,  etc.,  deposited,  and  should  be  carefully  footed  before  presenting  the  same  for 
deposit. 

631.  To  Receive  a  Deposit,  the  teller  should  examine  the  deposit  slip  carefully  and 
compare  and  check  off  each  item  listed,  and  should  note  that  all  paper  deposited  is  properly 
indorsed. 

632.  A  Proper  Indorsement  requires  the  exact  signature  of  the  Payee  on  the  back  of 
the  left  hand  end  of  the  paper  endorsed.  If  indorsed  by  a  clerk  or  agent,  his  name  should  also 
be  added;  as,  "  Brown  &  Company,  by  A.  B,  Hill.^^ 

633.  Deposits  Received  are  entered  in  the  customer's  Pass  Book  and  then  passed  to  the 
accountant  who  enters  the  same  to  the  credit  of  the  depositor  in  the  Individual  Ledger. 


BUSINESS  PRACTICE  BOOKKEEPING 


161 


The  General  Ledger 

625.     To  the  General  I^edger  are  forwarded  a/l  the  accounts  of  the  Bank  under  the 
following  titles: 

Resources:  Eiabilities: 


1. 

2. 

Cash 
Loans 

3. 

Stocks  and  Bouds 

4. 

Real  Estate 

5. 

Premium  on  Bonds 

6. 

Furniture  and  Fixtures 

7.. 

Expense 

8. 

Interest 

9. 

Taxes 

10. 

N.  Y.  Bank 

11. 

Chicago  Bank 

12. 

San  Francisco  Bank 

1. 

Capital  Stock 

2. 

Surplus  Fund 

3. 

Undivided  Profits 

4. 

Discount 

5. 

Circulation 

6. 

Sundries  Banks 

/    . 

Dividends  Unpaid 

8. 

Certified  Checks 

9. 

Certificates  of  Deposit 

10. 

Cashiers  Checks 

11. 

Notes  Payable 

12. 

Individual  Deposits 

626.  The  Form  of  the  General  Ledger  should  have  the  above  accounts  conveniently  ar- 
ranged to  facilitate  rapid  posting,  as  this  book  should  always  be  in  balance. 

627.  The  Daily  General  Balance  Sheet  listing  the  above  accounts  and  showing  the 
balance  of  each  should  be  taken  daily  to  verify  the  accuracy  of  the  accounting;  the  total  Re- 
scncrces  always  being  equal  to  the  total  Liabilities. 

General  Balance  Sheet  B.   C.   Bank 


1 

Kesonrces: 

-m 

MdtrtJAY 

'ITTESDAY 

WEDNESDAY 

Thursday 

Loans 

I 
3 

I228g22 

420603 

63 
18 

I22g262 

63 

1 

Stocks  and  Bonds 

410603 

18 

Real  Estate 

5 

121834 

5^ 

I21834 

56 

Premium  on  Bonds 
Furniture  and  Fix. 

7 
9 

20000 
9342 

37 

20000 

9917  ^ 

37 

Expense 

II 

2030 

26 

2780 

26 
20 

-. 

Interest  Paid 

13 

10204 

20 

10225 

Taxes  Paid 

15^ 

17 
19 

2000 

3000 

\  N  V.  Bank 

28040 
10201 

30 

29439 

20 

Chicago  Bank 

8701 

30 

^-- 

San  Francisco  Bank 
Cash 

21 

n 

46000 

50500 

254102     14  ' 

258872      74 

. 

• 

Dr.  Totals 

2153280  ^  64 

,     2155136      44. 

L/iahilities: 

Capital  Stock 
Surplus  Fund 

2 

250000 

250000 

' 

4 

55500 
38104    33 

55500 

'    U?idivided  Profits 

6 

38104 

33 

--'- 



Discount  a7id  Int.       1 

8 

5960 

1250 

50 

; 

Collection  and  Ex. 

10 

105 

118 

2^; 



Circulation 

12 

14QI00 

i4gioo 

. 

i _ — 

Stmdries  Banks 

14 

7500 

7700 

.fo 

Dividends    Unpaid 

16 

1          igoo 

1500 

Certified  Checks 

18 

1          1485 

50 

2^; 

\         1582 

Certificates  of  Deposit   20 

15846 

16244 

Cashiers  Checks 

22 

2708    25 

2000 

Notes  Payable 

24 

Individual  Deposits 

26 

i62';oyi 

?-^ 

16260^6 

$6 

- 

Cr.   Totals 

• 

2153280 

64 

2155136 

44 

J  > 


162  BUSINESS    PRACTICE    BOOKKEEPING 

628.  A  General  Statistics  or  Financial  Statement  Sheet  should  be  made  out  daily 
weekly,  or  monthly  as  the  board  of  directors  may  elect.  This  consists  of  a  General  Balance 
Sheet  together  with  the  records  of  Gross  Earnings,  Expense,  Interest,  Taxes  Paid,  Net  Earnings, 
for  the  current  year  and  for  one,  two  or  three  years  past,  that  comparison  may  be  made.  Other 
items  of  information,  such  as  Accozints  Opened,  Accounts  Closed,  Accotaits  Active,  etc.,  may  be 
enumerated. 

Discount  and  Collection  Ticklers 

629.  In  the  Discount  and  Collection  Ticklers  are  arranged  all  time  discounts  and 
collections  with  reference  to  their  maturity.  This  record  is  kept  so  that  the  bank  may  know  when 
to  demand  payment  of  its  paper.     This  book  or  some  equivalent  device  is  essential  in  every  bank. 

630.  Discount  Paper  is  any  commercial  paper  bought  by  the  bank  at  a  Discount.  A 
Straight  Loan  is  paper  received  without  discount  by  the  bank  for  money  loaned. 

631.  Collection  Paper  is  any  paper  left  at  the  bank  for  collection.  Unlike  Discount 
Paper  it  is  not  the  property  of  the  bank. 

632.  Si^ht  Paper  is  any  paper  payable  at  sight,  and  Time  Paper  is  payable  at  some 
future  date. 

633.  To  Time  and  Number  paper  is  to  write  the  date  of  maturity  and  its  number  on  the 
face  in  red  ink.     This  should  be  done  as  soon  as  it  is  received  and  recorded. 

Note — As  the  function  of  the  tickler  is  about  the  same  as  the  Notes  Receivable  and  Notes  Payable 
Book,  and  because  there  are  so  many  books  and  devices  for  this  purpose,  no  particular  form  is  here  given. 


The  National  System 


634.  The  National  System  of  bank  accounting  differs  from  the  JVew  York  System  prin- 
cipally in  the  use  of  a  Daily  Cash  Journal  instead  of  a  Geiieral  Cash  Book. 

635.  The  Personal  Ledger,  General  Ledger,  the  Disconnt  Register,  the  Draft  Registers,  the 
Remittance  Blanks,  and  all  the  auxiliary  books  and  forms  are  practically  the  same  as  those  used 
in  the  New  York  System. 

TH]^    CASH    JOURNAI, 


Checks  in  Detail 


Total  Checks 


/ 


Ueposits 


^ 


=-<&-<  :^  A 


"^-TK-ci^  C^ 


't?^-z-i  --z-^^ 


7.0  O 
/  o  a 


So 


-24 


Le-i^.'td  i^tz-yu.:.£y 


3:2,0 

/  Jl  o 
J-JS 

*  J^o  0, 
-2  cry 
/J/ 

/SO  Q 


^0 


'/  7  0  0 


^  Y  o  0 
^S  o  o 


y  a  ^ 
/  a  o  o 

^yy^ 


\X3  '?'SV 


^^.^s.^  2^^;f^ 


7^ 


/-^ 


J"!? 


/  s  <y  o 

ji/y 
/ 1/  00 


/ 


/ 

/ 

/ 

/ 


/ 


-2J-y 


-jT^  ^  (; 


^^ 


/^ 


.2^ 


/  :^y  s' 

/  X 

f  1^  / 

:io  o 

/  0  0  0  o 


-2^ 


/  J 


^^^■-rv 


j-i? 


;?-5 


i2i£ 


636.     In  the  Cash  Journal  are  entered  summaries  of  all  the  business  done  by  the  bank 
each  day.     All  cash  received  by  the  bank  or  credits  given  are  entered  on  the  credit  or  right  hand 


164  BUSINESS    PRACTICE    BOOKKEEPING 

side,  and  all  cash  paid  out  or  charges  made  are  entered  on  the  debit  or  left  hand  side  of  the  Cash 
Journal,  each  item  opposite  its  proper  title  which  is  written  in  the  center  of  the  page. 

637.  In  Small  Banks  where  the  "  Ca^e  System'"  is  not  used,  the  Cash  Jotcrnal  is  divided 
into  two  parts  or  divisions.  In  the  first  are  entered  the  Personal  or  Individual  accounts,  and  in 
the  second  are  listed  the  General  2iCQ.onvi\.s.     See  p.  163. 

638.  The  Personal  Journal  contains  on  the  dedit  side  a  list  of  all  the  depositors'  checks, 
in  detail  and  in  total,  received  by  the  bank  during  the  day;  and  on  the  credit  side  all  of  the  de- 
posits are  entered.     In  listing  checks  begin  on  the  base  line  and  use  only  one  column. 

639.  The  General  Journal  contains  the  debits  and  credits  of  all  general  accotints  sum- 
marized from  the  Personal  Journal  z.\\di.  from  the  other  books  and  files  of  original  entry. 

640.  The  Deposits  Account  in  the  General  Ledg-er  consists  o{  the  footings  of  the  Per- 
sonal Journal.     The  total  checks  are  the  debit  and  the  total  deposits  are  the  credit  of  that  account. 

641.  The  I/Oans  and  Discounts  Account  consists  of  the  commercial  paper  bought,  as 
a  debit,  and  that  collected  by  the  bank,  as  a  credit. 

642.  Interest  Received,  and  Discount  charged  zxe  credited  to  those  accounts  respectively, 
while  Interest  paid  and  Discount  allowed  are  debited. 

643.  Correspondent  Banks  are  debited  with  the  Remittances  sent  them  and  with  all 
of  their  drafts  cashed  by  the  bank.  They  are  credited  with  all  remittances  received  from  them 
and  with  all  drafts  drawn  on  them  by  the  bank. 

644.  Sundries  Accounts  are  debited  or  credited  as  in  commercial  accounting  and  the 
general  principles  of  journalizing  govern  all  cases  in  banking  the  same  as  in  ordinary  bookkeep- 
ing. 

645.  The  Cage  System,  used  in  the  larger  banks  only,  requires  each  Paying  teller,  re- 
ceiving teller,  discount  clerk,  or  other  employe  in  charge  of  a  ''  cage,'^  to  prove  his  cash  at  the 
close  of  each  day's  work. 

Note — A  "  Cage"  is  a  small  compartment  of  a  bank,  in  charge  of  a  teller  or  an  assistant,  the  business 
of  which  is  a  distinct  unit. 

646.  Cash  is  Proved  when  the  balance  of  the  vouchers  of  any  Cage  is  equal  to  the 
change  in  the  cash.  The  Payifig  Teller's  vouchers  consist  mainly  of  checks,  bank  drafts,  and 
other  commercial  paper  cashed.  The  Receiving  Teller's  vouchers  are  the  deposit  slips,  checks, 
and  other  paper  received  as  cash. 

The  Teller's  Sheet 

647.  The  Teller's  Sheet  contains  a  summary  of  all  the  business  transacted  by  the  teller 
in  charge  of  a  cage,  together  with  a  list  of  its  cash  at  the  close  of  the  day. 

648.  Teller's  Sheets  vary  in  form  according  to  the  nature  of  the  business  transacted. 
The  Receiving  Teller's  Sheet  would  naturally  report  more  cash  received  and  on  hand  than  the 
Paying  Teller' s,  and  the  Discount  Clerk' s  Sheet  would  pertain  largely  to  lyoans  and  Discounts, 
and  to  Interest  and  Discount.  The  report  of  the  Teller  in  charge  of  the  Domestic  and  Foreign 
Exchange  department  would  consist  largely  of  Bills  of  Exchange,  Drafts,  Collection  and 
Exchange,  etc. 

649.  In  the  following  day's  work  illustrated,  no  Clearings  have  been  provided  for. 
The  columns  for  "  Ozct  Clearings"  and  "  In  Clearings"  are  used  when  checks  on  local  banks  are 
exchanged  directly  between  banks  or  through  a  Clearing  House. 

650.  A  Careful  Study  of  the  Teller's  Sheet  should  be  made  by  the  student  as  it  illus- 
trates exactly  the  same  business  shown  in  the  General  Cash  Book  of  the  New  York  System  and 
the  Daily  C ash  Journal  oi  the  National  System. 

651.  When  several  Cages  are  used  in  a  bank,  each  one  furnishes  a  Telle}-' s  Sheet,  and  these 
are  all  summarized  and  totaled  in  the  Daily  Cash  /ournal. 


BUSINESS  PRACTICE   BOOKKEEPING 


165 


652.  The  Inunctions  of  all  the  above  may  be  united  in  one  or  more  cages  and  report 
made  accordingly. 

653.  After  the  Teller's  Sheets  are  proved  they  are  handed  to  the  General  Bookkeeper  who 
summarizes  the  same  in  the  Cash  Journal,  the  debits  of  which  should  equal  the  credits. 


No.    1.  Individual  Debits 

No.    3.  General  Debits 

No.    5.  Out  Clearances 

No.    7.  Remittances 

No.    9.  Bank  Paper 

No.  n.  P.  O.  Orders 


TELLER'S  SHEET 

Teller  No.  1. 


Date  i^^?;:?:^^-^^^^, 191^-^— 

Business  Collie  National  Bank,  Chicago,  111. 


No.    2.     Individual  Credits 
No.    4.     General  Credits 
fo.    6.    Clearings 
No.    8.     Remittance  Drafts 
No.  10.     Bank  Paper 
No.  12. 


No.  5.   Out  Cle/« 


^7^^/' 


^/:^!^a 


No.  7 

REMIT'NCES 


Gold  20s 
Gold  10s 
Gold  5s 
U.  S.  Notes 
Silver  $1.00 
Silver      .50 
Silver      .25 
Silver      .10 


LAWFUL  RESERVE 

Kat'l  Bank  Notes 

Nickels 

Cent  Pieces 


7^ 


'^ 


VICTUAL  CASH 

Other  Cash  Items 


TOTAL   CASH 


DEBITS 

No.  1  Checks 
No.  3  General 
No.  5  Out  Clearings 
No.  7  Out  Rem. 
No.  9  Bank  Paper 
No.  11  P.O.  Orders 


^  <P  a 


YO 


¥0 


V/' 


7' 


Zo 


i^O 


No.  2   Deposits 
No  4.  General 

No.  6  In  Clearings 

(Checks  rec'd  from 
local  Banks.) 
No.  8  Rem.  Drafts 

No.  10  Bank  Paper 


HAT- 


o^ 


654.  The  Checks  and  Deposit  Slips  are  turned  over  to  the  Individual  Ledger  accountants 
who  enter  the  same  in  the  Individual  or  Depositor's  Ledger y  proving  the  accuracy  of  their  work 
by  the  Skeleton  I,edger  Proof  Sheet  system.     See  p.  117. 


166 


BUSINESS    PRACTICE    BOOKKEEPING 


655.  Accuracy  is  absolutely  essential  in  all  bank  bookkeeping.  Every  transaction  is  ac- 
companied by  one  or  more  vouchers  and  these  with  the  change  in  the  amount  of  cash  received 
and  paid  out  should  prove  the  accounts  correct. 

656.  Should  Mrrors  occur,  the  bookkeeper  should  persist  in  his  search  until  they  are 
found  and  remedied.  Much  of  the  benefit  of  a  strong  business  course  comes  from  the  repeated 
efforts  of  the  student  when  hunting  for  errors  and  in  proving  balances. 

The  Bank  Balance  Sheet 


en. 


/ 

3 

7 

f 
// 

/3 

/J 

V 

A/ 
23 

r 

/z 
/^ 

f? 

2^ 
2C 


J-^C-d^^e^-z^ 


'  ^^^K^ytM^/pe^^^^^ 


657.     The  Balance  Sheet  of  Banking  is  very  similar  to  that  illustrated  and  used  in  the  pre- 
vious mercantile  sets.     The  following  are  the  principal  differences  necessary: 


BUSINESS    PRACTICE    BOOKKEEPING  167 

1.  The  Resources  and  the  Liabilities  are  taken  from  the  Daily  General  Balance  Sheet. 

2.  The  Net  Loss  or  Net  Gain  is  not  added  to  the  Capital  Stock,  but  distributed  to  the 
Surplus  Fund,  Dividend  Accotmt,  and  U^idivided  Profits  account,  as  ordered  by  the  Board  of 
Directors  of  the  bank. 

658.  In  National  Banks,  before  dividends  are  declared,  10%  of  the  profits  must  be  carried 
to  the  Surplus  Fund,  until  it  equals  one-fifth  of  the  capital  stock  of  the  bank. 

Note— It  is  customary  in  most  banks  to  declare  a  certain  rate  of  dividend  semi-annually,  and  place  all 
surplus  profits  in  the  Surplus  Fund.     The  Surplus  Fund  of  many  banks  is  many  times  their  Capital  Stock. 

659.  The  student  should  stud3^the  Ba}ik  Balance  Sheet  until  he  understands  it  thoroughly, 
and  a  full  discussion  of  the  same  should  be  required. 

Note. — It  will  be  observed  in  the  above  that  the  odd  numbers  are  given  to  the  debits  and  the  e-ven  num- 
bers to  the  credits.  Accountants  become  so  familiar  with  the  accounts  and  their  respective  numbers,  that 
they  find  it  unnecessary  to  use  the  name  titles. 

The  Daily  Balance  Book 

660.  The  Daily  Balance  Book  or  General  Balance  Sheet  is  identical  with  that  of  the  New 
York  System  as  illustrated  on  page  161. 

661.  The  Red  and  Black  System  is  also  used  by  many  banks,  the  Resources  being  written 
in  red  ink  and  the  Liabilities  in  black,  the  sum  of  the  reds  always  being  equal  to  the  sum  of  the 
blacks. 

662.  The  Signature  Book  ox  Signature  Cards  are  for  the  purpose  of  recording  the  signatures 
of  depositors.  When  there  is  a  doubt  as  to  the  genuineness  of  the  signature,  reference  is  made 
to  the  Signature  Book. 


BANKING 

Actual   Business  Practice 

663.  A  Careful  Study  of  the  books  and  forms  used  in  bank  bookkeeping  is  necessary 
to  a  successful  management  of  the  bank.  Systematic  work  as  well  as  accuracy  is  essential.  Every 
entry  made  should  be  exactly  right.  It  often  takes  longer  to  find  one  careless  error  than  to  make 
a  complete  daily  balance. 

664.  Sooks  Used  are:  Signature  Book,  Discount  Register,  Draft  Register,  Remittance 
Register,  Collection  Register,  Ticklers,  Journal,  Individual  Ledger,  and  General  Ledger. 

665.  The  following  instructions  should  be  followed  to  the  letter: 

1.  Read  not  less  than  three  times  all  the  discussions  from  page  148  to  167  inclusive. 

2.  Note  the  forms  and  uses  of  all  the  books  and  blanks  of  Banking. 

3.  Be  accurate  in  every  detail  and  your  proofs  and  balances  will  take  care  of 
themselves. 

4.  In  receiving  deposits  place  each  bank's  checks  in  separate  stacks.  Stamp 
'  ^ Paid ' '  on  those  of  your  own  bank  and  stick  on  cancelling  file.  Indorse  the  others  and  list 
them  on  the  Clearing  House  deposit  slip. 

5.  Keep  a  Currency  Slip  of  all  cash  received  and  all  cash  paid  out  until  you  are 
familiar  with  the  work.  This  will  facilitate  the  proving  of  cash  at  the  close  of  the  day's 
business. 

6.  Keep  each  day's  business  by  itself  until  Friday,  when  checks  and  deposit  slips 
are  assorted,  pass  books  written  up  and  distributed,  and  other  papers  classified. 

7.  Money  trays  must  be  locked  up  every  evening  and  any  shortage  will  be  charged 
to  cashier  and  tellers. 

666.  Jailing  Devices  and  trays  for  the  sytematic  filing  of  Cask,  Loa/is  and  Discounts, 
Commercial  Paper,  Bank  Paper,  Vouchers,  etc.,  should  be  provided  for  each  bank,  as  accuracy 
can  be  secured  only  by  being  thoroughly  systematic. 

667.  Number  of  Banks.  The  number  of  banks  necessary  to  do  the  work  of  a  class  de- 
pends upon  the  number  of  students  to  be  accommodated  as  bankers.  One  student  in  a  bank  can 
usually  do  the  bank  work  for  from  twenty-five  to  fifty  students.  Two,  working  in  the  same 
bank,  can  handle  the  work  of  from  fifty  to  seventy-five.  A  class  of  thirty  or  more  should  have 
at  least  two  banks. 

668.  Study  Carefully  the  "Special  Instructions"  on  the  next  page  and  observe  the  out- 
line of  work  when  the  "Bajik  is  Ope>i"  and  when  the  '' BanTc  is  Closed.''  By  following  these  in- 
structions to  the  letter,  no  trouble  need  be  expected  by  even  the  most  ordinary  student. 


BUSINESS  PRACTICE  BOOKKEEPING  169 

SPBCIAI,  INSTRUCTIONS 

DUTIES    OF    CASHIER 

1.  The  Cashier  has  general  supervision  of  the  Bank  and  should  be  responsible  for 
the  accuracy  of  all  accounts. 

2.  He  should  re-check  the  work  of  the  Tellers,  especially  in  filling  out  the  clearing 
and  remittance  blanks,  that  no  errors  may  escape  notice. 

3.  The  Cashier  has  full  charge  of  the  General  Cash  Book  or  the  Cash  Journal  and 
proves  cash  each  day. 

4.  He  has  charge  of  the  General  Daily  Balance  Book,  and  writes  up  and  strikes  the 
daily  balance  each  day,  posting  from  the  General  Cash  Book  or  Cash  Journal. 

5.  He  makes  all  loans,  and  discounts  all  paper,  sells  drafts,  certifies  checks,  re- 
ceives deposits,  and  does  such  other  counter  work  as  circumstances  require. 

6.  He  is  Ex-officio  Secretary  of  the  corporation,  has  charge  of  the  stock  books  of 
the  bank,  and  with  the  President  signs  and  issues  all  certificates  of  stock  and  distributes 
dividends. 

7.  Balance  Sheets  and  Statements  are  made  out  by  the  Cashier,  and  at  the  close  of 
his  term  of  service  is  given  credits  according  to  his  efficiency. 

duti:es  of  thf  tki<I/FR 

1.  The  Teller  is  assistant  to  the  Cashier  and  works  under  his  direct  supervision. 

2.  His  duties  are  to  receive  deposits,  to  represent  the  Bank  at  the  Clearing  House, 
to  make  out  all  clearing  Deposit  Slips  and  Remittance  L,ists,  to  write  up  and  prove  the  Indi- 
vidual lycdger,  to  write  up  the  Pass  Books,  and  to  do  such  other  work  as  the  Cashier  may  direct. 

3.  He  shall  also  keep  the  Discount  and  Collection  Ticklers  and  see  that  the  Tickler 
File  is  properly  kept  up  to  date. 

4.  The  Teller  must  keep  the  oSice  well  dusted,  books  and  appliances  in  order,  and 
see  that  all  waste  paper  is  placed  in  the  waste  paper  basket. 

5.  If  a  regular  accountant  is  employed  he  should  relieve  the  Teller  of  a  portion  of 
the  above  duties.  He  should  be  required  to  write  up  Pass  Books,  list  the  clearings,  to  assist 
on  the  Individual  I,edger,  and  perform  such  other  duties  as  the  Cashier  may  require. 

charg:ks  and  tim:^ 

1.  The  charges  on  drafts  on  Chicago,  New  York,  San  Francisco,  etc.,  are  25  cents 
for  each  $100,  with  a  minimum  of  25  cents. 

2.  Six  percent,  per  annum  is  charged  on  all  straight  loans,  and  V^.  percent,  col- 
lection on  Wi^  face  of  all  paper  collected,  unless  otherwise  instructed. 

3.  A  discount  of  ten  percent,  per  annum  is  charged  on  all  paper  at  mattirity  value 
with  an  additional  charge  of  ^/4  percent,  on  the  face  value  for  collection. 

4.  Interest  at  twelve  percent,  per  annum  is  charged  on  overdrafts.  This  should 
be  collected  every  Monday.  For  method  of  finding  interest  on  overdrafts,  see  Sweet's 
Modern  Business  Arithmetic,  p.  229. 

5.  On  notes,  drafts,  and  bills  left  for  collection  charge  one  percent,  on  the  face  for 
collection. 

EXPENSES,    ETC. 

1.  The  Cashier  is  to  be  paid  $50,  the  Teller  $40.  and  the  Accountant  $30  per  week 
salaries.     Payments  and  entries  should  be  made  on  Fridays. 

2.  Stationery  bills  are  paid  as  follows:  On  Mondays,  $10;  on  Wednesdays,  $15; 
on  Fridays,  $20. 

3.  Pay  rent  at  $50  per  week,  also  any  other  expense  bills  that  may  be  presented. 


170  BUSINESS    PRACTICE    BOOKKEEPING 

GUIDB    TO    PRACTICAI,    BANKING 

669.  Duties  of  bank  cashiers,  tellers,  and  accountants  consist: 

Eirsi — The  "counter  work  "  or  the  business  conducted  with  the  depositors  and  customers  of 
the  Bank, 

Second — The  compiling  of  the  records  of  the  business  transacted,  the  summarizing  and 
posting  of  these  entries,  and  the  verification,  reconciliation,  and  proof  of  the  same. 

670.  The  Principal  Business  of  the  Bank  consists  of  Rcceivmg  Deposits,  Neg-otiaHng 
Loans,  Discounting  Paper,  Selling  Drafts,  Issuing  Certificates  of  Deposit,  Certifyi7ig  Checks,  Mak- 
ing Collections,  Receiving  Paper  for  Collection,  Sending  Paper  to  Banks  for  Collection,  etc. 

BANK    IS    OPEN 
O    671.    Receiving  Deposits: 

1.  Require  every  depositor  to  record  his  signature  in  the  Signature  Book  or  on  the 
Signature  Card. 

2.  Examine  critically  all  cash,  checks,  drafts,  or  other  commercial  paper  deposited 
as  cash,  as  to  amount,  genuineness,  accuracy,  signature,  and  indorsement. 

3.  Check  off  all  items  on  the  Deposit  Slip  and  review  the  additions.  Make  no 
mistakes. 

4.  Charge  ^A  percent,  collection  on  all  checks  or  drafts  of  non-correspondent  banks. 

5.  Enter  the  total  amount  of  the  deposit  in  the  Pass  Book  and  return  same  to  the 
depositor. 

6.  Place  cash  in  tray,  stamp  "  Paid  "  on  the  Bank's  checks  and  place  on  the  can- 
celling file.  Assort  and  file  all  other  paper  received,  but  do  not  stamp  "  Paid  "  on  them  as 
they  either  go  to  the  Clearing  House  or  are  sent  away  as  Remittances, 

O    672.    Negotiating  l,oans: 

1,  When  a  loan  is  requested,  full  information  as  regards  the  reliability,  financial 
circumstances,  and  future  certainty  of  payment  by  the  borrower  should  be  ascertained. 
Without  this  information,  no  loan  should  be  made  without  ample  security. 

2,  To  make  the  loan,  draw  up  the  note  and  have  the  borrower  sign  it.  If  surety 
is  given  the  guarantor  should  sign  also.  If  indorsers  are  required,  stamp  or  write  "  Pay- 
ment Guaranteed"  on  the  back  and  have  them  sign  underneath. 

3,  Give  Cashier  s  Check  or  currency  for  the  face  of  the  note  or  give  him  credit  in 
his  Pass  Book  and  treat  it  as  a  deposit. 

4,  Enter  the  loan  in  the  Discount  Register  the  same  as  a  note  or  draft  discounted, 

5,  ^^  Ti7ne''  and  ''Number'^  the  note  and  place  in  its  proper  pocket  in  the 
tickler  file. 

O    673.    Discounting  Paper: 

1 .  Examine  critically  the  paper  offered  for  discount  as  regards  genuineness,  valid- 
ity, maturity,  negotiability,  responsibility  of  the  maker  and  indorsers,  amount,  and  rate  of 
interest.     Buy  only  valuable  paper. 

2.  Discount  the  total  amount,  (face  plus  the  interest  at  maturity)  for  the  time  yet 
to  run.  Charge  10%  per  annum  discount.  Also  charge  %%  on  the  face  of  the  paper  for 
collection. 

3.  Give  Cashier's  Check  or  currency  for  the  Net  Proceeds  or  give  credit  in  Pass 
Book  for  same. 

4.  ''Time''  and  '' Nimber"  the  Note  or  Draft  and  enter  in  the  Discount  Register. 

5.  File  in  the  tickler  box  under  its  proper  date  and  title. 


BUSINESS   PRACTICE   BOOKKEEPING  171 

O    674.    Making  Remittances: 

1.  Bank  Paper  of  other  banks  received  as  deposits  or  cashed  by  the  Bank  are 
usually  sent  to  a  correspondent  bank  in  some  metropolitan  city. 

2.  Enter  these  on  the  Remittance  Sheet  and  charge  to  correspondent  bank. 

3.  Indorse  properly  and  send  by  earliest  mail  possible. 

O    675.    Receiving  Remittances: 

1.  All  Remittances  received  should  be  credited  to  the  bank  sending  the  same. 

2.  Charge  every  item  to  its  appropriate  account  in  the  Individual  or  General 
Accounts. 

O    676.    Selling  Drafts: 

1.  Make  out  Draft  for  the  required  amount  and  enter  in  the  Draft  Register. 

2.  Charge  ^'i%  exchange  on  all  drafts  sold. 

8,  As  a  rule,  make  out  the  draft  in  favor  of  the  purchaser,  unless  otherwise 
ordered,  and  stamp  ''Pay  to  the  order  of'  on  the  back.  This  will  remind  the  buyer  that  he 
should  indorse  it  before  delivery. 

4.  Receive  customer's  check  or  currency  for  the  face  plus  the  exchange  and  file 
same. 

O    677.    Issuing  Certificates  of  Deposit: 

1.  Make  out  Certificate  of  Deposit  for  the  amount  deposited  and  hand  to  customer. 

2.  Make  out  Certificate  of  Deposit  ' '  deposit  slip  ' '  for  the  amount  of  cash  or  checks 
received.     This  becomes  a  deposit  for  this  accoiint. 

3.  Enter  in  Certificate  of  Deposit  Register  and  file  all  checks  received. 

O    678.     Certifying  Checks: 

1.  Examine  check  carefully  and  note  whether  the  maker  has  funds  in  the  bank 
sufficient  to  cover  it. 

2.  If  he  has,  stamp  ''Certified,''  "date,"  "Name  of  Bank,''  and  sign  as 
"  Cashier." 

3.  Make  out  "  Certified  Checks"  deposit  slip  for  the  amount  and  charge  at  once  as 
a  check  to  the.  maker. 

O    679.    Making  Collections: 

1.  Examine  Ticklers  for  Paper  due  today. 

2.  Compute  the  interest  and  add  to  \h&face  of  the  paper,  and  send  out  "due  notices. ' ' 

3.  Collect  the  amounts,  including  Interest. 

4.  Receipt  the  paper  by  marking  "  Paid^'  on  same  with  Bank's  signature,  and 
deliver  same  to  payee. 

5.  Enter  the  collections  for  the  day  on  Eoans  and  Discounts  in  the  General  Cash 
Book  or  Cash  Journal,  also  the  total  Interest  collected. 

6.  Collections  of  Paper  Left  for  Collection,  (not  the  propertj^  of  the  Bank)  are 
credited  to  the  owner  or  paid  to  him  either  in  cash  or  by  Cashier's  Check.  Charge  V^^o  on 
all  such  collections. 

O    680.    Receiving  Paper  for  Collection: 

1.  See  that  the  Paper  is  negotiable  and  properly  and  fully  endorsed. 

2.  Give  a  receipt  for  it,  or  write  acknowledgment  in  the  back  of  customer's  Pass 
Book. 

3.  File  in  tickler  and  collect  at  maturity. 

4.  If  there  are  indorsers,  ascertain  whether  the  payee  desires  the  paper  protested 
if  not  paid  when  due. 


172  BUSINESS    PRACTICE    BOOKKEEPING 

O    681.    Sending  Paperio  Banks  for  Collection: 

1 .  Enter  in  Register  ' '  To  Whom  Sent. ' ' 

2.  Indorse  properly  and  send  to  correspondent  or  other  bank. 

3.  If  Sight  Paper,  or  other  paper  treated  as  cash,  charge  to  the  bank  to  which  it 
is  sent. 

O    682.     The  Clearing  House: 

1.  All  Bank  Paper  of  local  banks  should  be  listed  on  Clearing  House  Deposit  Slips ^ 
and  at  the  proper  hour  sent  to  the  Clearing  House. 

2.  Credit  will  be  given  for  the  deposit  at  the  Clearing  House  and  the  Bank  will  be 
charged  with  whatever  paper  may  be  given  in  return. 

3.  The  balance,  either  to  be  paid  or  received  by  the  Bank,  should  be  in  cash. 

4.  In  metropolitan  cities  where  there  are  many  banks,  the  Clearing  House  man- 
ager issues  checks  against  the  debtor  banks  in  favor  of  the  creditor  banks.  These  may  be 
cashed  at  the  debtor  banks  or  added  to  the  next  day's  clearings. 

BANK    IS    CI.OSED 

683.  During  Banking  i?b«rs,  spare  moments  should  be  spent  in    ''writing  up''   the 
blanks  and  books  that  less  work  may  be  required  after  the  Bank  is  closed. 

684.  As  soon  as  the  Bank  closes  its  window,  the  Cashier,  Tellers,  and  Accountants  should 
proceed  to  foot,  summarize,  and  post  as  follows: 

O    685.     Teller's  Proof  Sheets: 

1.  If  the  eage  system  is  used  by  the  bank  make  out  ''Teller's  Sheet"  and  prove  the 
cash  of  each  cage.  If  all  the  Teller's  Sheets  prove  up  with  the  cash,  the  daily  balance  is 
practically  assured. 

2.  Pass  the  hidividual  checks  and  deposit  slips  to  the  Individual  Ledger  accountant 
who  will  proceed  to  write  up  and  prove  this  book. 

3.  The  z'C?/(r//^;.y  belonging  to  the  general  accounts  are  handed  to  the  General  Ledger 
accountant  who  writes  up  the  books  and  proves  Cash. 

O    686.    Discount  Register: 

1.  Foot,  prove,  rule,  and  transfer  footings  to  the  General  Cash  Book  or  Cash 
Journal. 

2.  Post  to  Tickler  all  time  paper  and  check  the  same. 

3.  All  " discowits"  collected  should  be  marked  "  Paid." 
O    687.     Collection  Register: 

1.  Post  to  tickler  all  time  papers  and  check  the  same. 

2.  "  Collections"  collected  should  be  marked  "  Paid." 
O    688.    Draft  Registers: 

1.  Enter  all  drafts  sold  and  drawn  on  correspondent  banks  on  the  credit  side. 

2.  Enter  all  drafts  cashed  and  received  drawn  on  our  bank  by  correspondents,  and 
all  our  own  drafts  returned  on  the  debit  side. 

3.  Foot,  balance,  and  rule. 
O    689.    Remittances  Received: 

1.  All  Remittances  received  from  correspondent  banks  should  be  debited  to  those 
banks  in  the  General  Cash  Book  or  Cash  Journal. 

2.  All  Remittances  received  should  be  debited  to  their  several  accounts,  general  or 
individual. 


BUSINESS  PRACTICE    BOOKKEEPING  173 

O     690.    Individual  Ledger: 

1.  Enter  deposits  from  the  Deposit  Slips  and  stamp  them  "  Entered.'' 

2.  Enter  all  of  the  Bank's  checks  properly  and   stamp  them  ''Entered.'"     Foot 
and  extend  totals  to  total  column. 

3.  Forward  dai/y  only  the  personal  accounts  affected  each  day,  and  prove  by  the 
Skeleton  Proof  Sheet ' '  method. 

4.  Forward  all  personal  accounts  once  per  week  and  prove  by  totals. 
O    691.     General  Cash  Book  and  Cash  Journal: 

Note — It  will  be  noted  that  the  General  Cash  Book  and  the  Cash  Journal,  while  having-  the  same  pur- 
])ose,  use  a  different  method  in  debiting  and  crediting  titles.    See  discussions  of  each  book,  pp.  158,  159,  163,  164. 

I.  Enter  on   the   dedit  side  of  the   General  Cash  Book,  or  on  the  credit  side  of  the    Cash 
Jouriial,  the  following: 

1.  The  total  Deposits,    forwarded  from  the  footing  of  the  deposits  column  in  the 
Individual  Ledger. 

2 .  The  total  of  drafts  sold  and  remittances  received  taken  from  the  Draft  Registers 
and  Remittance  Sheets. 

3.  Sundries  Banks,  credited  with  cash  items  received  for  collection  and  credit. 

4.  Loans  and  Discounts,  including    all    collections    on    this  account  during   the 
day. 

5.  Interest  and  Discount,  the  total  of  all  interest  received. 

6.  Collection  and  Exchange,  charges  on  drafts  sold,  and  for  making  collections. 

7.  Certificates  of  Deposit,  both  time  and  demand,  given  for  cash  received. 

8.  Certified  Checks,  which   have   been  certified    during   the  day  and  charged    to 
depositors'  accounts. 

9.  Cashier's  Checks,  given  out  instead  of  cash  in  payment  of  sundries  items. 

10.  General  Sundries  Accounts,  for  which  cash  is  received;  such  as,  Real  Estate, 
Chattels,  Eurniture  and  Fixtures,  Stocks  and  Bonds,  Premium,  Profit  and  Loss,  etc. 

II.  Enter  on  the  credit  side  of  the  General  Cash  Book,  or  on  the  debit  side  of  the   Cash 
Journal,  the  following: 

1.  The  total    Checks,   forwarded   from  the  footings  of    the  checks  column  in  the 
Individual  Ledger. 

2.  The  total  of  drafts  cashed  and  out  remittances,   taken  from  the   Draft  Registers 
and  Remittance  Sheets. 

3.  Sundries  Banks,  debited  with  cash  items  sent  for  collection. 

4.  Loans  and  Discotaits,   the  total  of  ''face  of  paper''   of  all   loans  or   discounts 
bought  during  the  day. 

5.  Interest  and  Discount,  paid  on  deposits,  on  notes  payable,  or  charged  from  Dis- 
count Register. 

6.  Collection  and  Exchange  paid  to  other  banks  for  making  collections. 

7.  Certificates  of  Deposit,  both  time  and  demand,  cashed  by  the  bank  or  received 
for  credit. 

8.  Certified  Checks,  cashed  by  the  bank  or  received  for  credit. 

9.  Cashier's  Checks,  either  cashed  or  received  for  credit. 

10.  General  Sundries  y^r<r^?/;^/5,  for  which  cash  is  paid;  such  as,  Real  Estate,  Chat- 
tels, Furniture  and  Fixtures,  Stocks  and  Bonds,  Premium,  Stationery,  Expense,  Taxes,  Profit 
and  Loss,  etc. 


174  BUSINESS  PRACTICE  BOOKKEEPING 

692.     General  J^edger: 

1 .  Post  to  the  credit  of  their  accounts  in  the  General  Ledger,  all  the  items  on  the 
debit  or  left  hand  side  of  the  General  Cash  Book.  If  a  Cash  Journal  is  used,  post  from  the 
credit  or  right  hand  side  to  the  credit  of  the  several  accounts.  (Add  to  blacks  or  subtract 
from  reds.) 

2.  Post  to  the  debit  of  their  accounts  in  the  General  Ledger,  all  the  items  on  the 
credit  or  right  hand  side  of  the  General  Cash  Book.  If  a  Cash  Journal  is  used,  post  from  the 
debit  or  left  hand  side  to  the  debit  of  the  several  accounts.  (Add  to  reds  or  subtract  from 
blacks.) 

3.  The  Siwi  of  the  Resources  should  always  equal  the  Swn  of  the  I,iabilities. 

4.  If  the  ''  Red  and  Black''  system  is  used  the  sum  of  the  reds  should  equal  the 
sum  of  the  blacks,  the  Resources  being  written  in  red  ink  and  the  Liabilities  in  black. 

5.  A  Balance  Sheet  showing  the  losses  and  gains  of  the  bank  should  be  made  out 
each  week. 


Corporation  Accounting 


693.  A  Corporation  is  an  association  of  individuals  organized  under  the  laws  of  a  state 
or  of  the  United  States  for  the  purpose  of  conducting  their  affairs  as  a  single  person. 

694.  Corporations  are  organized  for  many  purposes,  the  most  important  of  which  are: 

1.  For  vi7inicipal governme7it,  as  countries,  towns,  and  cities. 

2.  For     educational,    religious,    and     charitable   purposes ;    as     schools,    colleges, 
churches,  hospitals,  etc. 

3.  For    transportation   and  communication ;     as  railway,  express,  telegraph   and 
telephone  companies. 

4.  For  the  promotion  of  large  enterprises  ;    as  mining,  insurance,  and  development 
of  the  natural  resources  of  a  country. 

5.  For  the  gmeral  pro7notio7i  of  btisiness;    as  banks,  large  commercial  concerns, 
importers,  jobbers,  wholesalers,  and  even  many  smaller  firms  are  incorporated. 

695.  A  Corporation  may  sue  and  be  sued,  and  is  held  responsible  for  the  legality  of  its 
acts  the  same  as  an  individual  or  firm. 

696.  Most  Corporations  organized  for  business  purposes  are  /oint  Stock  Companies 
having  a  stated  Capital  Stock  which  is  divided  into  shares,  the  owners  of  which  are  called  Stock- 
holders. 

697.  The  Capital  Stock  of  a  corporation  is  the  entire  amount  which  may  be  contributed 
by  the  stockholders. 

698.  Paid  Tip  Capital  Stock  is  the  amount  of  the  Capital  Stock  actually  paid  in  to  the 
treasurer  by  the  stockholders. 

699.  treasury  Stock  is  that  portion  of  the  Capital  Stock  which  has  not  been  subscribed. 
It  is  usually  reserved  for  the  future  needs  of  the  corporation  and  may  be  sold  to  increase  the 
working  capital. 

700.  Common  Stock  is  the  regular  stock  of  a  corporation  subject  to  no  privileges  over 
other  stock. 

701.  Preferred  Stock  is  stock  issued  to  rehabilitate  a  corporation  in  a  weakened  condi- 
tion, and  takes  precedence  in  the  matter  of  drawing  dividends.  Thus  preferred  stock  may  receive 
a  certain  per  cent,  dividend  from  the  profits  of  a  business  and  the  remainder,  if  any,  may  be  dis- 
tributed as  dividends  generally. 

702.  Watered  Stock  is  stock  issued  for  which  no  consideration  is  received.  The  issuing 
of  watered  stock  is  usually  for  the  purpose  of  either  inflating  the  value  of  the  stock  of  a  corpora- 
tion or  for  reducing  the  high  rate  percent,  of  profit  on  the  capital  stock  which  in  some  states  is 
forbidden  by  law. 

703.  CertiAcates  of  Stock  are  issued  to  the  stockholders  and  represent  the  amount  of 
stock  owned  by  each.  The  par  value  is  usually  $100  but  may  be  any  sum  designated.  These 
Certificates  are  transferable  and  may  be  bought  and  sold  the  same  as  other  property. 

704.  The  Individual  Responsibility  of  persons  composing  a  corporation  depends 
upon  the  laws  of  the  state  in  which  the  organization  is  effected.  The  laws  governing  corpora- 
tions are  so  varied  in  the  different  states  that  no  attempt  to  enter  into  details  will  here  be  made. 

705.  A  Practical  Outline  of  how  to  organize  a  corporation  and  how  to  keep  its  stock 
accounts  being  all  that  is  intended  in  this  work,  we  shall  at  once  proceed  to  organize  the  College 
National  Bank. 


176  BUSINESS    PRACTICE    BOOKKEEPING 

The  College  National  Bank 

ORGANISATION 

706.  Subscriptions  are  solicited  by  those  interested  in  organizing  the  corporation  and  a 
general  plan  outlined  regarding  the  business  to  be  conducted. 

707.  The  Subscription  I/ist  should  contain  the  signatures  of  the  subscribers,  their  ad- 
dresses, their  occupation,  the  number  of  shares  subscribed  for,  the  par  value  and  total  amount 
of  each  subscription. 

FORM    OF    SUBSCRIPTION    I^IST 

708.  We,  the  undersigned,  hereby  subscribe  and  agree  to  pay  for  the  number  of  shares  of 
the  capital  stock  of  the  National  College  Bank,  at  par  value,  set  opposite  our  respective  names: 


DATE. 

SIGNATURE. 

ADDRESS. 

OCCUPATION. 

NO.  OF  SHARES. 

PAR  VAL. 

AMT. 

Dec.  I 

D.  L.  Hunt 

San  Fran. 

Merchant 

Eighty  8o 

$100 

$8000 

I 

C.  P.  Maddux 

>>          >» 

i> 

Eighty  8o 

100 

8000 

\ 

I 

S.  S.  Working 

»)          >> 

Banker 

Sixty     6o 

IQQ 

6000 

\2 

F.   W.Jewett 

)>          >) 

>> 

Sixty    6o 

100 

6000 

2 

W.J.  Meeker 

Portland 

Lawyer 

Sixty    6o 

TOO 

6qoo 

3 

J.  F.  Harvey 

)> 

»i 

Sixty     6o 

IQQ 

6qoo 

3 

H  K.  Harvey 

11 

)) 

Forty    4.0 

IQQ 

4000 

4 

R.   W.Rex 

Santa  Rosa 

Capitalist 

Twenty  20 

IQO 

2000 

A.  C  Knick 

>>          >» 

»> 

Twenty  20 

IQQ 

2000 

4 

^H  B.  Ans^win 

)i          >) 

Physician 

Twenty  20 

IQQ 

2000 

\ 

Note — The  above  represents  the  usual  form  of  a  subscription  list  used  for  soliciting-  subscribers, 
.signatures  must  be  genuine  and  the  document  is  preserved  for  future  reference. 


The 


709.  When  the  Subscription  List  is  completed  a  meeting  is  called,  temporary  officers 
chosen,  and  the  business  outlined  in  the  following  minutes  transacted: 

Minutes  of  the  First  Stockholders  Meeting 

710.  Chicago,  111.,  December  1,  191--. 

At  a  meeting  held  in  the  office  of  the Business  College,  for  the  purpose  of  organ- 
izing a  joint  stock  company  to  conduct  a  general  banking  business   in  the  Business 

College  in  the  City  of  Chicago,  State  of  Illinois,  the  following  persons  were  present: 

D.  L.  Hunt,  C.  P.  Maddux,  S.  S.  Working,  F.  W.  Jewett,  J.  F.  Harvey,  W.  J.  Meeker, 
H.  K.  Harvey,  R.  W.  Rex,  A.  C.  Knick,  and  H.  B.  Angwin. 

The  meeting  was  called  to  order  by  Mr.  C.  P.  Maddux,  who  briefly  stated  that  the  meeting 
was  called  for  the  purpose  of  organizing  a  joint  stock  banking  company,  and  that  the  following 
stock  had  already  been  subscribed: 

Mr.  S.  S.  Working  then  nominated  Mr.  C.  P.  Maddux  as  temporary  chairman,  who  upon 
motion  was  unanimously  elected  to  that  position.  Mr.  H.  K.  Harvey  was  nominated  Secretary 
pro  tern,  and  unanimously  elected.  Upon  motion  by  Mr.  Jewett  the  Secretary  was  instructed  to 
prepare  a  Subscription  Book  and  collect  fifty  per  cent,  of  the  stock  subscribed,  and  to  report  at 
Ihe  next  meeting.     Upon  motion  meeting  adjourned  until  Dec.  15,  191--. 

(Signed)  C.  P.  Maddux,  Chairman,  pro  tern. 
H.  K.  Harvey,  Secretary,  pro  tern. 


BUSINESS    PRACTICE    BOOKKEEPING 


177 


711.  After  the  required  collections  on  subscribed  stock  are  made,  a  second  meeting  of  the 
stockholders  is  called  and  the  following  business  transacted: 

Minutes  of  the  Second  Meeting 

712.  Chicago,  111.,  Dec.  15,  191--. 

A  second  meeting  was  this  day  held  for  the  purpose  of  organizing  a  Joint  Stock  Banking 
Company  at Business  College  Hall  and  the  following  persons  were  present: 

D.  I..  Hunt,  C.  P.  Maddux,  S.  S.  Working,  F.  W.  Jewett,  J.  F.  Harvey,  W.  J.  Meeker, 
H.  K.  Harvey,    R.  W.  Rex,  A.  C.  Knick,  and  H.  B.  Angwin. 

The  meeting  was  called  to  order  by  the  temporary  chairman,  C.  P.  Maddux.  After  the 
reading  of  the  minutes  of  the  former  meeting,  which  were  duly  approved,  the  secretary  made  his 
report  as  follows:  "  I  have  received  from  each  subscriber,  in  cash,  one-half  of  the  amount  of  his 
subscription  and  have  issued  receipts  for  the  same.  Some  of  the  subscribers  are  ready  and  will- 
ing to  pay  up  their  full  subscriptions.  I  have  sent  the  Comptroller  of  Currency  a  statement  of 
the  intentions  of  the  company,  have  filed  an  application  for  an  Organization  Certificate  with 
him,  and  expect  returns  in  a  very  few  days.  (Signed)  H.  K.  Harvey,  Secretary  pro  tern.'" 

Upon  motion,  the  report  of  the  Secretary  pro  tern,  was  adopted  and  ordered  placed  upon 
record.  A  motion  was  made  and  carried  that  a  committee  of  three  be  appointed  to  prepare  by- 
laws to  be  presented  at  the  next  meeting.  The  chairman  then  appointed  the  following  persons 
as  members  of  the  said  committee:  C.  P.  Maddux,  S.  S.  Working,  H.  K.  Harvey.  Upon 
motion  meeting  adjourned  for  one  week.  (Signed)  C.  P.  Maddux,  Chairman,  t>rotem. 

H.  K.  Harvey,  Secretary,  pro  tern. 

Third  Meeting 

713.  At  the  third  meeting,  by-laws  are  adopted  and  a  Board  of  Directors  elected. 

714.  The  board  of  directors  immediately  proceed  to  hold  a  session  in  which  they  elect 
officers  who  are  authorized  to  complete  the  organization.  The  officers  issue  to  the  stockholders 
the  stock  already  paid  for,  and  upon  receipt  of  "  Certificate  of  Organization"  are  ready  to  do 
business. 

715.  The  Cashier  as  Secretary  next  proceeds  to  open  the  Subscription  Book.  This  he  does 
by  entering  the  names  of  the  stockholders,  their  addresses,  the  number  of  shares  subscribed  for, 
the  par  value  of  each  share,  and  the  amount  of  the  subscriptions.  When  no  "  Subscription  List" 
is  used  stockholders  write  their  signatures  in  this  book. 


,.vj^  6Lz.^ /^/^ 


^^ 


-^z^<?'e--<^^-^z%-'^^<^S<?--g'-z---<g--»-zX^^^^^ 


716.  In  this  work,  the  Subscription  Book  and  Installment  Book  have  been  combined.  In 
the  Installment  Book  is  entered  the  record  of  the  stock  issued  on  each  installment.  This  record 
is  compiled  from  the  stubs  of  the  Stock  Certificates  Book  as  illustrated. 


178 


BUSINESS    PRACTICE    BOOKKEEPING 


Subscription  and 


DATE. 

«UJ3SC 

SIGNATURE. 

RIFTIONS. 

ADDRESS. 

No. 
Sh«s. 

Par 
Val. 

AMOUNT. 

T>ec.      1 

D.  I.  Hunt 

San  Francisco 

80 

$100 

$8000 

1 

C.  P.  Maddux 

}}           }> 

80 

100 

8000 

\     / 

S.  S.  Wor Icing 

>}           }} 

60 

100 

6000 

2 

F.  W.  Jewell 

}f           )) 

60 

100 

6000 

2 

■    ir.J.Meehr 

Portland 

60 

100 

6000 

,    3 

J.  F.  Harvey 

)} 

60 

100 

6000 

:    3       H.K.Harvey 

5) 

40 

100 

4000 

A 

R.  W.  <RtT 

Sanla  ^osa 

20 

100 

2000 

A 

A.  C.  Knick 

»        }} 

20 

100 

2000 

A 

H  T.  Angwin 

"      . " 

20 

100 

2000 

717.  In  the  Subscription  Book  is  entered  the  names  of  the  stockholders  together  with 
the  number  of  shares  subscribed  for,  the  par  value  of  each  share,  and  the  amount  of  each  one's 
subscription. 

718.  The  Installment  Book  shows  the  amount  of  subscriptions  paid  in,  the  amounts 
due  on  subscriptions,  the  numbers  of  the  certificates  given,  and  the  number  of  shares  issued. 


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Received  (his  Certtficale 


No.  6, 


Par  Value, 

instai,IvM:rnt  scrip 
It  is  Hereby  Certi£ed,  That J.  F.  Harvey. 


Chicago,  III.,  Jan.  1,  191- 
is  the  oivner  of  Sixty 


Shares  of  Stock  in  the  COLLMGM  NATIONAL  BANK,  of  Chicago,  III".,  ufiofi  which 
he  has  paid  Fifty  Dollars  per  share.  He  is  entitled  to  a  full  Certificate  of  Stock  zipon  payment 
of  final  histallment  and  surrender  of  this  voucher. 

C.  P.  Maddux,  President.  R.    W.  Rex,  Secretary. 


BUSINESS  PRACTICE    BOOKKEEPING 

Installment  Book 


179 


First  Insta: 

Certif.      No.  Shares 
No.            trom  -  to 

LLMENT 

DATE 

,50% 

Amt. 

Sec( 

Certif. 
Ko. 

3ND  InSTA 

No.  Sliafps 
from.  •  to 

XLMENT,  25  %. 
DATE         Amt.    . 

Third  Instali^ment, 

Certif.      No.  Shares        rkATW 
i    No.            from  -  to          ^^^^ 

25  %■ 

Amt. 

/              I       40 

Jan  I 

4000 

II 

251  2yo 

Feb.  I 

1 
2000 

'      14 

306   325 

Feb.  I 

2000 

2         41      80 

I 

4000 

12 

2'/I  2<)0 

I 

2000 

18 

3S6  375 

I 

2000 

3      81  1 10 

I 

3000 

13 

29^  305 

I 

1500 

4      ITI   140 

I 

3000 

, 

5  \  i4r  ^70 

I 

3000 

1    ■ 

\- 

6 

lyi  200 

I 

3000 

15 

326  345 

I 

2000 

i 

7 

20 T  220 

I 

2000 

8 

221  230 

I 

1000 

9 

231  240 

I 

1000 

■■ 

10 

241  250 

I 

1000 

16 

346  350 

Feb.  I 

500 

17 

351  355 

Feb.  I 

'  500 

1 

I 

■ 

' 

719.  The  Stock  Certificate  Book  contains  the  Certificates  of  Stock  with  their  corre- 
sponding stubs,  from  which  the  stockholders  receive  the  evidence  of  their  ownership  in  the  capi- 
tal of  the  company.  These  certificates  are  usually  made  transferable  on  the  books  of  the  company 
by  proper  indorsement  and  surrender  of  the  original  certificate.  All  certificates  issued  must  be 
signed  by  both  the  President  and  the  Secretary  of  the  company.  i 

Form  of  Stock  Certificate 


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iEESSSS^WS^ 


Indorsement  for  Transfer  of  Stock 
KNOW  All  Men  By   These  Presents,   That    I,  the  undersigned,  do  hereby 

constitute  and  appoijit as  my  attorney  to  transfer Shares 

of  the  Capital  Stock  represented  by  the  within  Certificate  on  the  books  of  the  College  Natio7ial 
Bank  with  full  power  of  substitution  in  the  premises. 

Signed 

In  the  presence  of 


180  BUSINESS    PRACTICE    BOOKKEEPING 

The  Stock  Journal 

720.  In  the  Stock  Journal  is  entered  an  account  of  the  original  stock  issued,  together 
with  all  the  transfers  of  stock  from  one  owner  to  another.  Transfers  are  made  by  person  or  by- 
attorney.     Post  from  this  book  tO  the  Stock  Ledger. 

FORM    OF    STOCK    JOURNAI/ 


DATE       i                                              1 
OF  ISSUE.!            IN  FAVOR  OF         j 

StJ^DER    ^^^-  OFSURRENDERER 

! 

NO.  CER. 
ISSUED 

NO.  CER.    j      NO.      NO.  SHRS.    \    __„,_ 
CANCELED   SHRS. ;     FROM-TO    {    *''"  ""^ 

fan]  I  I 

D.  L.  Hunt 

Jan  i  /  i     Original  Issue     \ 

1          r 

40^      r\    4o\ 

"   !  /  i 

C  P.  Maddux 

!              2 

40  \ 

1 \ 

41    So  \ 

"   '  I  \ 

S.  S.  Working 

"         '    ^'\ 

" 

1    ^ 

30  i 

.   81  no  i 

"       i    /    ; 

F.  W.  Jeweti 

"          1/    I 

)J                                 M 

1 

i         4 

JO  i'  III  140  ; 

"       \    I    \ 

W.J.  Meeker 

1          i 

„                       i 

1 

1         5 

30  \  141  170  I 

' 

CThe  following  illu 

jtrates  the  tra 

nsfer  of  twenty  shares 

ji-                 1 

1: 

! 

of  D.     L.    Hunt's 

itock  to  R. 

W.    Rex,    and  twenty 

i! 

!         1 
1 

shares  of  C.  P.  Mac 

1 
dux's  stock  to  M.  E.  Cook.) 

Eed-i  \ 

R.  W  Rex 

Feb    I  \ 

D.  L.  Hunt 

^9 

ri 

20  [306  325 

"    '^ 

M.  E.  Cook 

I 

C.  P.  Maddux 

20 

12 

20 

2yi  2 go 

i 

!    1 

1 

1 

' 

1 

• 

] 

1 
1 

1 
1 

i 

\         \ 

The  Dividend  Book 

721.  The  Dividend  Book  is  used  to  record  the  distribution  of  the  profits  of  the  business 
to  the  stockholders.  It  contains  the  names  of  the  stockholders  together  with  the  number  of 
shares  held  by  each,  the  par  value,  the  amount  of  dividend,  and  a  place  for  the  signature  of  each 
stockholder  (or  agent)  receiving  a  dividend.  The  dividend  is  reckoned  as  a  certain  percent,  of 
the  capital  stock  and  is  ordered  to  be  paid  by  the  board  of  directors  in  regular  session. 

722.  Post  from  the  Dividend  Book  to  the  Stock  I^edger. 

FORM  OF  DIVIDEND  BOOK 

T>ividend  ?fo.  /,  of  ^0  per  cent.  Declared  July  /,  /<9<9_. 


■ 

STOCKHOLDERS 

CERT.  I 
NOS.    j 

^°-    Ilf 

SHRS. ' 

PAR  VALUE. 

DIVIDEND    DATE  PD. 

1 

SIG,  FOR  RECEIPT      ^ 

REMARKS 

July  ^T 

D.  L.  Hunt        i-ii  1  6q    \ 

6000 

600  \ 

fuh 

I 

D.  L.  Hunt 

pdbychk 

July  ii 

C.  P.  Maddux  ' 

2/Sl    60      , 

6000 

600  j 

»( 

2 

C.  P.  Maddux 

July\i 

S.S.   Working 

3-^3  1  45 

4500 

450  ^ 

jj 

2 

S.S.  Working 

i! 

i 

\ 

i 

i 

;| 

July  Lr 

R.   W  Rex 

8-ig  1  30 

3000 

300 

July 

I 

'  R.  W.  Rex 

»              » 

July 

I 

M.  E.  Cook 

20 

20 

2000 

200 

)  > 

2 

M.  E.  Cook 

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BUSINESS    PRACTICE    BOOKKEEPING 


The  Stock  I^edger 

723.  The  Stock  hedger  shows  each  stockholder's  personal  interest  in  the  company  to- 
gether with  all  transfers  of  stock.  The  account  is  credited  with  the  number  of  shares  issued  to 
the  stockholder  and  with  each  dividend  when  apportioned.  It  is  a'^<^zV<f^  with  the  stock  trans- 
ferred and  also  with  payments  on  dividends. 

HOW    TO    POST 

724.  Post  from  the  Stock  Journal  by  crediting^  the  account  with  the  stock  issued  to  the 
stockholder  and  by  debiting  the  account  with  the  stock  transferred  to  others. . 

725.  Post  from  the  Dividend  Book  by  crediting  the  account  with  the  dividend  apportioned 
and  by  debiting  it  with  the  cash  paid  on  the  dividend. 

The  Assessment  Book 

726.  The  Assessment  Book  contains  the  names  of  stockholders  together  with  a  descrip- 
tion of  the  stock  owned  by  each  and  a  record  of  assessments  made  and  how  settled. 

FORM    OF    ASSFSSM^NT    BOOK 


plssessment  J^o.  2  of  W  per 

■  cent. 

Levied 

Sept 

15,   1 

delinquent  J^o.  15,  1 

T>ale  of  Sale,    ^ec.  15,  / 

STOCKHOLDER,      i         ADDRESS. 

fcEB. 

NO. 

NO. 
SHS. 

PARVAL. 

ASSESSMT. 

WHEN  P'd 

REMARKS. 

D.  L.  Hunt        San  Francisco 

/ 

40 

4000 

400 

Nov   I 

Paid  by  draft. 

C.  P.  Maddux    Chicago 

2 

40 

4000 

400 

3 

Cash  by  Express. 

\S.S.  Working 

3 

30 

3000 

300 

3 

»       )>         >> 

\  F.  W.  Jewett     \  San  Francisco 

4 

30 

3000 

300 

4 

Paid  by  check 

\J.  F.  Harvey      New  York 

5 

30 

3000 

300 

4 

Paid  by  Draft 

W.  J.  Meeker     San  Francisco 

6 

30 

3000 

300 

15 

Delinquent  notice  served 

H.  K.  Harvey    New  York 

7 

20 

2000 

200 

5 

Paid  by  Note. 

R.  IV.  Rex 

8 

10 

1000 

TOO 

10 

Paid  by  Check. 

A.  C.  Knick       Boston 

9 

10 

1000 

TOO 

10 

>>              >> 

'  H.  B.  Angwin     " 

TO 

10 

1000 

TOO 

15 

Delinquent  notice  served 

1 

Note — By  reference  to  the  above  it  will  be  seen  that  the  assessment  is  the  second  levied  by  the  com- 
pany, the  rate  is  10  per  cent.,  and  was  delinquent  Nov.  15.  The  date  of  sale  of  Delinquent  Shares  is  set  for 
Dec.  15.  Other  particulars  are  sometimes  given,  but  these  are  the  main  points  shown  in  the  Assessment 
Book. 

How  to  Open  Joint  Stock  Books 

727.  There  are  several  methods  for  opening  a  set  of  Joint  Stock  Books.  The  most 
common  Journal  entry  is  the  following: 

' '  A  Joint  Stock  Company  to  be  known  as  the  '  College  National  Bank '  has,  on  the  first  day 
of  January,  1913,  been  organized  with  a  capital  stock  of  fifty  thousand  ($50,000)  dollars,  divided 
into  500  shares  of  one  hundred  ($100)  dollars  each,  for  the  purpose  of  conducting  a  regular  com- 
mercial banking  business.  One-half  of  the  capital  stock  has  been  paid  to  the  secretary,  in  cash, 
and  the  balance  is  to  be  paid  in  two  monthly  installments  of  25  per  cent,  each." 

728.  In  Banking  the  Cash  foiirnal  would  be  opened  as  follows: 


BUSINESS  PRACTICE  BOOKKEEPING 

The  Cash  Book  or  Cash  Journal 


183 


729.     They?;.?/  debit  item  and  they?r.?/  credit  item  below  are  entered  here  for  the  purpose  of 
being  posted  to  the  Ledger  accounts  and  are  not  added  to  the  regular  cash  items  for  the  day. 

FORM    OF    CASH    JOURNAI/ 

Chicago,  III.,  Jan.  2,  1 


Jan  2 

Capital  Stock            '  50000 

Jan  1    Subscription               50000 

Suhscripiion                25000 

D.  L.  Hunt,        4000 

C.  P.  Maddux,  4000 

\. 

■  S.  S.  Working,  3000 

1 

F.  W.  Jewell,     3000 

-1 

W.J  Meeker,    3000 

i 

J.  F.  Harvey,     3000 

KK.  Harvey,    2000 

R.  W.  Rex,        1000 

A.  C.  Knick,      1000 

* 

H.B.:^ngwin,  1000 

1                   1 

730.  Subscription  Account  is  credited  with  the  total  cash  paid  in  by  stockholders  on 
their  subscriptions,  the  personal  credits  being  entered  in  the  Stock  Ledger  from  the  Stock  Jotcrnal 
and  has  nothing  to  do  with  the  regular  books  of  the  Bank. 

731.  When  Payments  on  Installments  are  made,  Subscription.  Account  is  credited  as 
above  with  the  total  cash  received.  When  all  subscriptions  are  paid  up,  Subscription  Account 
will  balance. 

732.  The  next  two  entries  will  be  the  purchase  of  U.  S.  Bonds  and  the  issuing  of  circula- 
tion as  follows: 


'  ' 

Circulalion 

18000 

1                     TV 

ir. 

s. 

^onds 

20000 

1 
i 

1 

\                                                     

1      '                   : 

\ 

'   ' 



• 

1. 

ii 

■                           .1   '          ■] 

! 

i    1 

' 

733.  The  Bank  is  now  prepared  to  begin  its  regular  banking  business.  The  student  should 
study  banking  in  its  entirety  before  trying  to  begin  a  set  of  banking  books.  As  most  of  the 
students  will  take  the  accounts  of  their  predecessors  and  therefore  will  not  have  an  opportunity 
to  open  the  books,  the  teacher  should  require  each  one  to  open  a  set  on  blank  paper  before  al- 
lowing him  to  take  charge  of  the  Bank  Books. 

WHEN    DIVIDENDS    ARE    DECI/ARED 

734.  When  the  Pro£ts  of  the  business   are  sufficient,    dividends  are   declared.     This  is 


184  BUSINESS    PRACTICE    BOOKKEEPING 

ordered  by  the  Board  of  Directors  in  regular  session  and  the  stockholders  are  at  once  credited  in 
the  Stock  Ledger  with  their  respective  shares  of  the  profits. 

735.  When  they  receive  the  cash,  or  check,  or  are  credited  with  the  amount  of  their  divi- 
dends on  the  bank  books,  their  account  in  the  Stock  I^edger  is  debited  with  the  same. 

736.  The  Dividend  Book  is  used  for  this  purpose,  and  postings  are  made  from  it  to  the 
Stock  L,edger. 

TO    THB    STUDENT 

737.  Study  carefully  the  subject  of  Corporation  Accounting  2iXiA  oi  Banking.  Do  not  be 
satisfied  until  you  have  a  definite  plan  for  j^our  work.  The  question  to  be  settled  first  of  all  is 
tnethod.     Perhaps  the  following  outline  of  work  will  help  you: 

1.  Procure  your  blank  books  and  study  their  forms  in  connection  with  the  text. 

2.  Prepare  your  Subscription  List  and  get  Subscriptions  for  the  Capital  Stock, 
which  should  not  be  less  than  $25,000. 

3.  Call  the  first  meeting  and  proceed  as  indicated  in  the  minutes  on  page  176. 

4.  Call  other  meetings  as  required  and  complete  the  organization  by  electing 
directors.     The  directors  elect  the  ofiicers. 

5.  As  you  will  be  the  cashier,  you  must  follow  out  the  directions  as  given  in  re- 
gard to  issuing  Certificates  of  Stock,  opening  Stock  Books,  and  also  opening  the  regular 
Banking  Books.  Do  not  get  the  two  sets  mixed,  as  they  have  very  little  to  do  with  each 
other. 

QUESTIONS 

1.  What  is  a  bank  ?     Name  the  classes  and  describe  each. 

2.  Explain  the  manner  of  organizing  a  National  Bank. 

3.  What  is  said  in  regard  to  the  "  Organization  Certificate?  " 

4.  How  many  directors  are  necessary  and  what  are  their  qualifications  ? 

5.  What  is  ' '  Circulation?  "     "  Dividends?' '     ' '  Surplus  Fund?  ' ' 

6.  Name  the  ofiicers  and  describe  their  duties. 

7.  Name  the  principal  books  used  in  Banking.     Describe  each. 

8.  How  are  the  Journal  entries  made  ? 

9.  Describe  the  method  of  proving  the  Cash. 

10.  Define  "  Discount  Paper. "     "  Collection  Paper. "     "Sight  Paper." 

11.  Explain  method  of  Summarizing  and  Posting. 

12.  Describe  a  Bank  Balance  Sheet. 

13.  Describe  method  of  Making  Collections,  Receiving  Deposits,  Discounting  Paper,  Mak- 
ing Loans,  Selling  Drafts,  Certifying  Checks,  Issuing  Certificates  of  Deposit,  Receiving  Paper 
for  Collection,  and  Sending  Paper  to  Banks  for  Collection. 

14.  Explain  how  entries  are  made  in  Discount  Register,  Collection  Register,  Draft  Register, 
Individual  Ledger,  Journal,  and  General  Ledger. 

15.  How  does  the  National  System  of  Banking  differ  from  the  New  York  System  ?  Name 
the  books  used.      Describe  each. 

16.  What  is  the  principle  of  reds  and  blacks  f 

17.  Explain  method  of  Summarizing.     Of  Posting. 

18.  Describe  the  work  when  the  bank  is  open. 

19.  Explain  method  of  proving  cash  and  of  making  daily  balance. 

20.  Define  Joint  Stock  Company.     Capital  Stock.     Stockholder. 

21.  What  are  Corporations?     Certificates  of  Stock? 

22.  Explain  the  purpose  of  the  two  classes  of  books  used  in  Corporation  Accounting. 

23.  Describe  the  Minute  Book.     Subscription  List. 

24.  Describe  the  process  of  organization  of  a  Corporation. 

25.  Explain  the  use  of  the  Subscription  and  Installment  Book. 

26.  What  is  Installment  Scrip  ?     Stock  Certificates? 

27.  How  are  certificates  of  Stock  transferred  ? 

28.  Describe  the  Stock  Journal.     Dividend  Book.     Stock  Ledger.     Assessment  Book. 

29.  Explain  the  method  of  opening  Corporation  Books. 


APPENDIX 

Legal  and  Business  Forms 

No  1.     Acknowledgment  by  Notary  Public. 

BttLU  at  (Halifornta 


>    ss. 
County  of ) 


On  Ihis day  of ,  in  the  year  one  thousand  nine  hundred 

and ,  before  vie, ,  a    'Nolary  'Public  in  and  for 

said^ County,  residing  therein,  duly  commissioned  and   sworn 

personally  appeared . 

known  to  me  to  be  the  person whose  name subscribed  to  the  within  instrument 

and acknowledged  that he executed  the  same.^ 

3n  JBttosa  hlI|?rfXlf,  /  have  hereunto  set  my   hand,  and  affixed   my 

Official  Seal,  at  my  office  in  the  City  of 

County  of ,  the  day  and  year  in  this 

Certificate  first  above  written. 


J^otary  Tublic. 
in  and  for  said County,  Slate  of  California. 

No.  2.     Release  of  Mortgage. 

SCnnm  all  Mtn  bg  ttj^js^  f  r^s^ttts: 

(lilltlt    that  certain  Mortgage,  dated /P/ , 

and  made   by 

the  pari of  the  first  part,  to 


the  part of  the  second  part 

and  recorded  in  the  office  of  the  County  Recorder  of  the  City  of County 

of ,  State  of ,  in  ^ooTc of , 

at  page ,  on  the day  of ,  191 , 

together  with  the  debt  thereby  secured,  is  fully  paid,  satisfied  and  discharged. 

3ln  WttttFafi   \XL\\iXtrxt, have  hereunto  set hand and  seat 


the day  of ,  in  the  year  of  our  Lord  one  thousand 

nine  hundred  and 

Signed,  Sealed  and  'Delivered  in  the  Presence  of 


> ■{  SEAL  y 

1 ■{  SEAL  y 


186  BUSINESS  PRACTICE  BOOKKEEPING 

No.  3.     Lease. 


^£mm  nf  ^Am\  lEHtat? 


®IjiB    3(nh?ntUrP,       Made    l/us . . Jay  of 

in  the   year  of  our  Lord  one  thoiisand  nine   Jmndred  and. 

Between 

J/ie  part of  the  first  part,  and 

, the  part of  the  second  part, 

Witnessetb:      That  the  said  part of  the   first  part,  do by    these  presents   lease  and 

demise  v7ito  the  part of  the  second  part 


with   the  appurtenances,  for  the  term  of 

from  the day  of ,  one  thousand  nine 

hundred  and ,  at  the rent  or  sum  of 

DOLLARS, 

payable   iii  Currency  of   the Business    College, 

in  advance,  on  the day  of  each  and  every  month  during  said  term., 

And  it  is  Further  Agreed^  that  if  any  rent  shall  be  due  and  unpaid,  or  if  default  shall  be 
made  in  any  of  the  covenants  herein  contained,  that  it  shall  be  lawful  for  the  said  part.....  of  the  first 

part  to  re-enter  the  said  premises,  and  remove  all  persons  therefrom.     And  the  said  part of  the 

second  part  do hereby  covenant,  promise  and  agree  to  pay  the  said  part of  the  first  part  the  rent, 

in  the  mayiner  hereinbefore  specified  and  not  to  let  or  underlet  the  whole  or  any  part  of  the  said 

premises  without  the  written  consent  of  the  said  part of  the  first  part. 

And  that  at  the  expiration  of  said  term,  the  said  part of  the  second  part  will  quit  and  stirrendef 

the  said  premises  in  as  good  state  and  conditio7i  as   reasonable    use    and  wear  thereof  will  permit 
{damage  by  the  elements  excepted). 

In   ^Witness   Whereof,  the  said  parties  to  these  presents  have  heremito  set  their  hands  aiid 

seals,  the  day  a^id year  first  above  written. 

Signed,  Sealed,  and  Delivered S  SEAL  \ 

in  the  presence  of  (  ) 

[ j  SEAL  I 


BUSINESS  PRACTICE    BOOKKEEPING  187 

No.  4.     Articles  of  Copartnership  . 

Arttrbs  of  OIn-partn?rai|tp 

ArttrbB  0f  Qln-parteraljtp,  MadeiMs- day  of. --19  , 

between of  the  Oily  of ,  County  of 

,  ,  Stale  of ,  and of  the  same 

place,  toitn^Hfiftlj: 

I.     The  parlies  above  named  have  agreed  to  become  partners  under  t?ie  firm  name  of 

in  the  business  of  manufacturing,  buying,  and  selling 

and  conducting  a  general business,  in 

the  City  of —- 

II.  The  partnership  hereby  formed  shall  commence  at  the  dale  hereof,  and  shall  continue 

for  the  term  of unless  dissolved  by  mutual  consent 

or  the  operation  of  the  law. 

III.  Said shall   contribute   to    the 

partnership  capital  the  sum  oj Dollars,   in  cash, 

and  said shall  contribute  the  sum  of 

f)ollars,  in  the  regular  assets  of  h business,  as  shown 

bv  the  following  statement: 


(Here  Paste  a  complete  Statement  of  the  Resources  and  Liabilities  of  Student) 


IV.  II  is  agreed  that  said shall  devote  his  whole  lime 

'to  the  conduct  of  the  business  and  furtherance  of  its  success,  and  for  such  services  shall 

receive  a  salary  of  fifty  dollars  per  week;  but  said. ^hall  not 

be  under  obligation  to  devote  any  time  or  attention  to  the  business,  nor  shall  he  receive  any 
salary  whatever. 

V.  It  is  agreed  thai  each  of  the  said  partners  shall  receive  his  share  of  the  profits,  and 
bear  his  share  of  the  losses  in  proportion  lo  the  capital  invested. 

VI.  Each  partner  shall  have  access  to  the  books  of  the  firm  at  all  limes,  and  at  the  dis- 
solution of  this  co-partnership,  the  said shall  render  a 

true  and  just  account  of  all  the  assets,  liabilities,  losses,  and  gains  of  the  business. 

Jn  UttttPHfi    \xi\\tXtrxi,  The  parties  hereto  set  their  hands  and  seals  in  duplicate 
Vie  day  and  year  first  above  written. 

\  SEAL  } 


BUSINESS    PRACTICE    BOOKKEEPING 


No.  5.     Insurance  Policy. 


^  3m  anh  iHarm?  insuranr:?  OInmpang  -^ 

STOCK  POUICY 


for  {he  term  of. 


3(n  Olmtfitb^rttOtt    of    the   stipulations     herein     named     and    of 

DOLLARS  Premium^  Does  insure 

from  the. day  of. 


.,  19...  ,  at  710071,  to  the. 


.day  of.. 


,  19 ,  at  710071,  agai7ist  all  direct  loss  or  da7nage  by  fi7'e,  e.xcept 

as  hereinafter  provided,  to  a7i  a7)to2mt  7iot  exceedi7ig 

DOLI^ARS, 

To  the  following  desc7ibed  property  while  located  and  contai)ied  as  described  herei7i  a7id7iot  elsewhere, 
to-wit: 

(The  property  insured  should  be  fully  described) 


1  This  company  shall  not  be  liable  beyond  the  actual  cash  value  of  the  property  at  the     1 

2  time  any  loss  or  damage  occurs  and  the  loss  or  damage  shall  be  ascertained  or  estimated     2 

3  according  to  such  actual  cash  value,  with  proper  deduction  for  depreciation  however  caused,     3 

4  and  shall  in  no  event  exceed  what  it  would  then  cost  the  insured  to  repair  or  replace  the     4 

5  same  with  material  of  like  kind  and  quality;  said  ascertainment  or  estimate  shall  be  made     5 

6  by  the  insured  and  this  company  or,  if  they  differ,  then  by  appraisers,  as  hereinafter  pro-     6 

7  vided;  and,  the  amount  of  loss  or  damage  having  been  thus  determined,  the  sum  for  which     7 

8  this  company  is  liable  pursuant  to  this  policy  shall  be  payable  sixty  days  after  notice,     8 

9  ascertainment,  estimate,  and  satisfactory  proof  of  the  loss  have  been  received  by  this  company     9 

10  in  accordance  with  the  terms  of  this  policy.     It  shall  be  optional,  however,  with  this  com-  10 

11  pany  totake  all,  or  any  part,  of  the  articles  at  such  ascertained  or  appraised  value,  and  also  11 

12  to  repair,  rebuild,  or  replace  the  property  lost  or  damaged  with  other  of  like  kind  and  qual-  12 

13  ity  within  a  reasonable  time  on  giving  notice,  within  thirty  days  after  the  receipt  of  the  13 

14  proof  herein  required,  of  its  intention  so  to  do;   but  there  can  be  no  abandonment  to  this  14 

15  company  of  the  property  described. 

This  policy  is  made  and  held  subject  to  the  foregoing  stipulations  and  conditions,  together 
with  such  other  provisions,  agreements,  or  conditions  as  may  be  indorsed  hereon  or  added  hereto, 
and  no  officer,  agent,  or  other  representative  of  this  company  shall  have  power  to  waive  any 
provision  or  condition  of  this  policy  except  such  as  by  the  terms  of  this  policy  may  be  the  subject 
of  agreement  indorsed  hereon  or  added  hereto. 

In   Witness   Whereof,  this  company  has  executed    and  attested  these  presents   this 
day  of ,   19 


Secretary, 


Preside7it, 


.Agent. 


BUSINESS  PRACTICE  BOOKKEEPING  189 

No.  6.     Warranty  Deed. 

WARRANTY    DEED 

®  I|t0   3)  ttU  tWXWtt^     Made  the day  of in  the  year  of  our  Lord 

one  thousand  nine  Jnmdred  and, lietween Part of  the  first 

part  and part of  the  second  part,      Witnesseth,  that   the  said 

fart.....  of  the  first  part,  for  a7id  in  consideration  of  the  sum  of    DOLLARS 

in  legal  currency  of  this  Business  College^  to in  hand  paid  by  the  said  part of  the  second  part, 

the  receipt  whereof  is  hereby  acknowledged,  do by  these  presents,  gra7it,  bargain,  sell,  convey  and 

confirm  unto  the  said  part .of  the  second  part,  and  to heirs  and  assigns  forever 


(An  accurate  description  of  the  property  to  be  conveyed.) 


T'Ogether  with  all  and  singiilar  tenements,  hereditaments  a7id  appurtenayices  thereu?ito  belong- 
ing or  in  anywise  appertaining ,  a7id  the  re7its,  issiies  and  profits  thereof:  To  Have  and  to  Hold, 
all  and  singular  the  above  mentio7ied  a7id  described  premises,  together  with  the  appurtenances,  unto 

the  said  part of  the  seco7id  part,  and  to heirs  and  assigns  forever.     And  the  said  part... ..of  the 

first  part,  and heirs,  the  said  premises  in  the  quiet  a7id  peaceable  possession  of  the  said  part..... 

of  the  seco7id  part.. heirs  and  assigns,  against  the  said  part.. ...of  the  f)'st  patt,  and. heirs,  and 

against  all  a7id  every  person  whb77isoever ,   lawfully  claiming  or  to  claim  the  sam,e,  shall  attd  will 
liVarrant,  a7id  by  these  presents  forever  Defend, 

In  W^itness  Whereof,  the  said  part of  the  first  part  ha hereunto  set ha7id  and  seal 

the  day  and  year  first  above  written. 

Signed,  Sealed,  and  Delivered        \  c^^t  ( 

in  the  presence  of  /  i 

SEAI. 


190  BUSINESS  PRACTICE    BOOKKEEPING 

No.  7.     Mortgage. 

SlljtB     iBHnngHg^     Made  mis day  of /«  the  year  of 

our  Lord  one  thousand  nine  hundred  and Between 

part.....of  the  first  part  and. the  part of  the  second  part ^ 

Witnesseth,    that   the   said  part of  the  first  part,  for  and   in    consideration   of  the   sum   of 

DOLLARS,  in  legal  currency  of  this  Business  College, 

io ill  hand  paid  by  the  said  part of  the  second  part,  the  receipt  whereof  is  hereby  acknowledged, 

do.....  by  these  presents,  grant,  bargain,  sell,  convey  and   confirm  unto  the  said  part of  the  second 

dart,  and  to heirs  and  assigns,  forever 

(An  accurate  description  of  the  property) 


^O^ether  with  all  a7id  singtilar  tenements,  hereditaments  and  appurtenances  thereiuito  belong- 
ing or  i7i  a7iy  wise  appertaining ,  and  the  rents,  issties,  and  profits  thereof:  ^O  Have  and  to  Hold  ^ 
all  and  singular  the  above  mentioned  and  described  premises,  together  with  the  appurtenances,  unto 

the  said  part.....of  the  second  part,  and  to heirs  and  assig7is  forever,  as  security  for  ihe  Pay77ie7it 

of : promissory  note ,  in  the  words  a7id figures  following,  to-wit: 

(An  exact  copy  of  the  note  jriven) 


A7id  it  is  hereby  agreed,  that  in  case  defatdt  be  made  i7i  the  payme7it  of  either  the  principal  or 

any  i7istallme7it  of  interest  as  provided  i7i  said  Note ,  or  in   the  performance  of  a7iy  of  the  covenayits 

herein  contained,  then  the  whole  su77i  of  principal  and  interest  shall  become  immediately  due  and  pay- 
able, at  the  option  of  the  said  part.....of  the  seco7id  paT't or  assigns;  and  suit 

viay  be  i77i77iediately  com7nenced  to  foreclose  this  m.ortgage  and  a  decree  be  had  to  sell  the  above  de- 
scribed preTnises  and  appurtenances ,  or  any  part  thereof,  iri  the  manner  prescribed  by  law,  and  to  pay 

fro7n  the  proceeds  of  sale  the  amou7it  found  due,  i7icluding  counsel  fee,  at  the  rate  of. per 

cent,  upon  the  amount  fou7id  due  for  principal  and  i7iterest  {which  cou7isel  fee  shall  be  held  to  be  due 
upon  the  fili7ig  of  the  complai7it)  or  a7iy  amou7it  allowed  by  the  Judge  of  the   Court  as  a  reaso7iaJ)le 

cou7isel  fee  for  foreclosing  this  Mortgage,  rendering  the  overplus  {if  any  there  be)  U7ito  the  said  part 

of  the  first  part  - .heirs  or  assigns. 

IN  WITNESS  WHEREOF,    The  said  par t.....of  the  first  part  ha hereunto  set hand..... 

and  seal.....the  day  a7id  year  first  above  writte7i. 


Signed,  Sealed  and    Delivered 
in  the  presence  of 


y 


A  SEAL  y 


A  SEAL  1^ 


BUSINESS    PRACTICE    BOOKKEEPING 


191 


No.  S.     Articles  of  Incorporation. 


Arttrl^B  of  inrorporation 


of  % 

(Name  of  the  Corporation) 


2(«0m  all  Urn  bg  X\\t^t  fr^a^nta 

T/iat  we,    the   luidersigned,    a   majority    oi   whom    are    citizens  and  residents  of  the  State  of 
,  have  this  day  vohaitarily  associated  ourselves  together  for  the  ptirpose  of 


forming  a  CORPORA  TION  under  the  laws  of  the  State  of 

An&  Wt  ll^r^ha  OJ^rtifg: 


FIRST. 


That  the  name  of  said  Corporatiofi  shall  be  the. 


SECOND.  That  the  purposes  for  which  it  is  formed  are. 


THIRD.          That   the  place    where    the  principal   bnsiness  of    said    Corporation   is  to  be 
transacted  is 


^years 


FOURTH.  That  the  terrn  for  which  said  Corporation  is  to  exist  is 

from  and  after  the  date  of  its  Incorporation. 

FIFTH.  That  the  number  of  Directors  or  Trustees  of  said  Corporation  shall  be 

and  that  the  names  and  residences  of  Directors  or  Trustees,  who  are  appointed  for  the  first  year,  and 
to  serve  until  the  election  and  qualification  of  such  officers,  are  as  follows,  to  wit: 

NAMES  WHOSE  RESIDENCE  IS 


SIXTH.  That  the  amount  of  Capital  Stock  of  said  Corporation  is_ 


Dollars  and  the  number  of  shares 


.of  the  par  value  of. 


into  which  it  is  divided  is 

Dollars  each. 

SEVENTH.          That  the  a77iount  of  said  Capital  Stock  which   has  been  actually  subscribed 
is . Dollars  aiid  the  folloiving  are  the  names  of  the 


persons  by  whom  the  same  has  been  subscribed,  to  wit: 


Names  of  Subscribers 

No.  OF  Shares 

Amount 


(over) 


192 


BUSINESS    PRACTICE    BOOKKEEPING 


3n    MJttn^HS  hll|pnnf,      We     have     hereunto     set    our     hatids      and     seals      this 
dav  of A .  D.  19 


Signed  and  Sealed  in  the  Presence 


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County    of 
State  of 


copy  of  Articles  of  hicorporation  of 
on  file  in  this  office. 


J 
.County  Clerfi.  of  the  said  County  of 

do    fiereby  certify   the  within  to  be  a  full,    true  and  correct 
as  remai)is 


iltt    MBtttt^BB    llll|?r?0f,     I  have  heretinto  set  my  hand  and  affixed  my  Official  Seal, 

this day  ct A.  D.  19 

Coinity  Clerk. 


\. 


UNIVERSITY    OF    CALIFORNIA    LIBRARY 


YE  0?""^^ 


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UNIVERSITY  OF  CAUFORNIA  LIBRARY 


MAR  23  Jg; 


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